What Is the OASDI Tax on My Pay Stub?

When examining a pay stub, many individuals notice a deduction labeled “OASDI” and may wonder about its purpose. This common entry represents a mandatory payroll tax that contributes to a federal social insurance program. Understanding this deduction involves knowing what it is, how its amount is determined, the benefits it supports, and how to identify it on your pay stub.

Understanding OASDI

OASDI stands for Old-Age, Survivors, and Disability Insurance. This program is commonly known as Social Security and serves as a foundational component of the Federal Insurance Contributions Act (FICA) tax. The FICA tax also includes contributions for Medicare. OASDI is a mandatory contribution for most working individuals in the United States, designed to fund social insurance programs that provide financial support. Both employees and their employers share the responsibility for these contributions.

How OASDI Contributions Work

The OASDI tax is applied to an individual’s earnings at a specific rate each year. For 2025, the tax rate for OASDI is 6.2 percent for employees, with employers contributing an equal 6.2 percent, for a combined total of 12.4 percent of wages. This tax applies only up to a certain income threshold known as the wage base limit. For earnings in 2025, this wage base limit is $176,100.

This means that any earnings above $176,100 in 2025 are not subject to the OASDI tax. For example, an individual earning $60,000 annually would have $3,720 deducted for OASDI ($60,000 x 0.062), and their employer would contribute the same amount. An individual earning $200,000 in 2025 would only pay OASDI tax on the first $176,100, resulting in a maximum employee contribution of $10,918.20 ($176,100 x 0.062).

Benefits Supported by OASDI

The contributions collected through OASDI taxes fund several types of benefits aimed at providing financial security. These benefits fall into three categories: Old-Age (retirement) benefits, Survivors benefits, and Disability benefits. Eligibility for these benefits is primarily determined by earning “work credits” over an individual’s working life. In 2025, one work credit is earned for every $1,810 in covered earnings, with a maximum of four credits obtainable per year.

Old-Age benefits provide income to eligible retired workers and their dependents. To qualify for retirement benefits, most individuals need to have accumulated 40 work credits, which typically equates to 10 years of work. Survivors benefits offer financial support to eligible family members, such as spouses, minor children, or dependent parents, after a worker’s death. Disability benefits are provided to individuals who are unable to work due to a severe medical condition that is expected to last at least a year or result in death. The number of work credits required for disability benefits varies based on the individual’s age at the onset of their disability.

Locating OASDI on Your Pay Stub

Identifying the OASDI deduction on your pay stub is typically straightforward, though the exact label can vary by employer. Common labels for this deduction include “OASDI,” “SS,” “Social Security Tax,” or “FICA-SS.” This deduction is usually found under a section designated for “Deductions” or “Taxes” on your pay stub. The amount shown represents your 6.2 percent share of the OASDI tax.

It is prudent to review this amount periodically to ensure its accuracy, especially in relation to your gross pay and the current year’s tax rate and wage base limit. The information regarding your OASDI contributions is reported to the Internal Revenue Service (IRS) and is reflected on your annual Form W-2, Wage and Tax Statement.