Social Security Tax
What Is OASDI on Your Paycheck?
OASDI is the federal payroll tax that funds Social Security. Congress created the program under Title II of the Social Security Act to provide monthly benefits in three categories: retirement income for workers who have earned enough credits, survivor payments for families of deceased workers, and disability income for workers who can no longer hold employment due to a qualifying medical condition.
Each pay period, your employer withholds 6.2% of your gross wages and sends that amount to the IRS. Your employer also contributes a matching 6.2% from its own funds, bringing the combined rate to 12.4%. You do not see the employer portion on your pay stub because it does not come out of your wages.
OASDI is one half of FICA (Federal Insurance Contributions Act). The other half is the 1.45% Medicare tax, which appears as a separate line item. Together, the two employee shares total 7.65% of wages, the standard FICA withholding on most pay stubs. The credits you earn through OASDI contributions determine your eligibility for Social Security retirement, survivor, and disability benefits later in life.
Paycheck Math
How Is OASDI Calculated on Your Paycheck?
Multiply your gross wages for the pay period by 0.062. On a $65,000 annual salary paid biweekly across 26 pay periods, each paycheck shows gross wages of $2,500 and an OASDI withholding of $155.00 ($2,500 x 0.062). The rate stays at 6.2% for every pay period until your year-to-date earnings reach the wage base limit.
For 2026, the wage base is $184,500. Once your cumulative wages hit that amount, your employer stops withholding OASDI for the rest of the calendar year. If you earn $184,500 or less, the 6.2% rate applies to every dollar of wages you receive. The maximum OASDI an employee can pay in 2026 is $11,439 ($184,500 x 0.062).
Some pre-tax deductions affect the calculation. Section 125 cafeteria plan deductions for health, dental, and vision premiums reduce your FICA-taxable wages before the 6.2% is applied. Traditional 401(k) contributions, by contrast, reduce your federal income tax wages but do not reduce your Social Security wages. If the OASDI amount on your pay stub does not equal 6.2% of your gross pay, cafeteria plan deductions are the most common explanation.
Annual Cap
What Is the 2026 OASDI Wage Base Limit?
The IRS and SSA set a taxable earnings cap each year, tied to changes in the national average wage index. For 2026, only the first $184,500 of your annual wages is subject to the 6.2% OASDI tax. Earnings above that threshold are not taxed for Social Security purposes. This cap is what causes OASDI withholding to drop to zero on certain paychecks later in the year for workers whose salary exceeds the limit.
If you hold two jobs during the same calendar year and your combined wages exceed $184,500, each employer withholds OASDI independently. Neither employer knows what the other is withholding, so you may end up paying more than $11,439 in total. Claim the excess Social Security tax when you file your federal tax return. The IRS will apply the overpayment as a credit or refund.
Unlike Medicare tax, which has no wage ceiling, OASDI stops once you hit the cap. That is why you may notice a bump in your net pay partway through the year if your salary exceeds the wage base. The SSA publishes historical wage base figures at ssa.gov/oact/cola/cbb.html.
Employer Share
Does Your Employer Also Pay OASDI?
Yes. Your employer pays 6.2% on the same wages, matching the amount withheld from your paycheck dollar for dollar. If your biweekly OASDI deduction is $155, your employer sends an additional $155 to the IRS from its own funds. The employer share never appears as a deduction on your pay stub because it is not taken from your wages. It is a separate cost your employer pays on top of your gross salary.
Self-employed individuals pay both halves through self-employment tax, the full 12.4% for OASDI plus 2.9% for Medicare. However, they can deduct the employer-equivalent half as an adjustment to income on their federal tax return, which lowers their adjusted gross income.
Pay Stub Labels
How Does OASDI Appear on Your Pay Stub and W-2?
Payroll systems use several labels for the same tax. Common ones include:
- Fed OASDI/EE: the most common label, where /EE means employee share
- FICA-SS or FICA-OASDI
- SS Tax or Soc Sec
- Social Security Tax
If you see Fed OASDI/ER on an employer cost summary, that is the employer's matching share, not a deduction from your pay.
On your Form W-2, OASDI appears in two boxes. Box 3 shows your Social Security wages, which is the taxable amount capped at the wage base. Box 4 shows the Social Security tax withheld, which should equal Box 3 multiplied by 0.062. If Box 3 is lower than your total earnings, that means your wages exceeded the $184,500 cap and only the capped amount was taxed.
OASDI Withholding on a $65,000 Salary (2026)
| Line item | Amount |
|---|---|
| Gross annual salary | $65,000.00 |
| OASDI rate (2026) | 6.2% |
| Under wage base ($184,500)? | Yes |
| Annual OASDI ($65,000 x 0.062) | $4,030.00 |
| Per biweekly paycheck ($4,030 / 26) | $155.00 |
| Employer match (same rate) | $4,030.00 |
| Combined annual deposit | $8,060.00 |
How much OASDI is withheld from a $65,000 annual salary at the 2026 rate of 6.2%, assuming biweekly pay with 26 pay periods.
Exemptions
Who Is Exempt from OASDI?
Most W-2 employees pay OASDI starting from their first dollar of wages. A few narrow categories are exempt:
- Members of qualifying religious groups who have received an IRS-approved exemption from Social Security and Medicare taxes
- Certain nonresident aliens on F-1, J-1, M-1, or Q-1 visas during their exempt period
- Students employed by the school, college, or university where they are enrolled and regularly attending classes
- Self-employed individuals earning less than $400 in net annual self-employment income
State and local government employees hired before certain dates who participate only in a public retirement system may also be exempt. Federal employees hired before January 1, 1984, who remained under the Civil Service Retirement System rather than switching to FERS, do not pay OASDI. All federal employees hired after that date are covered.
Household employers do not withhold OASDI if they pay a worker less than the annual threshold set by the IRS for that calendar year. If you believe you qualify for an exemption, confirm with the IRS or your employer before assuming your withholding is wrong.
Troubleshooting
What Should You Do If Your OASDI Looks Wrong?
Compare the OASDI line on your pay stub to 6.2% of your gross wages for that period. If the numbers do not match, check for these common causes:
- Section 125 deductions: Health, dental, and vision premiums paid through a cafeteria plan lower your FICA-taxable wages before the 6.2% is applied. The OASDI amount will be 6.2% of gross pay minus those premiums, not 6.2% of total gross.
- Wage base reached: Once your year-to-date earnings hit $184,500, withholding stops or is reduced on the paycheck that crosses the threshold.
- Bonus or commission: Supplemental wages are subject to OASDI at the same 6.2% rate, but the withholding may look different if it pushes you past the wage base mid-period.
- Multiple employers: Each employer withholds independently. If combined wages exceed $184,500, claim the overpayment when you file your federal tax return.
Traditional 401(k) contributions do not reduce your Social Security wages. If you expect your 401(k) deferral to lower your OASDI, it will not. Only Section 125 cafeteria plan deductions and certain other qualified benefits reduce FICA-taxable wages.
If none of these explains the discrepancy, contact your payroll or HR department. Employers can file corrected returns with the IRS to fix withholding errors.
Tax Forms
What Forms Report Your OASDI Contributions?
Your employer reports Social Security wages and tax withheld on Form W-2 each January:
- Box 3: Social Security wages (capped at the wage base, so this figure will not exceed $184,500 for 2026)
- Box 4: Social Security tax withheld (should equal Box 3 x 0.062)
Self-employed individuals report both the employee and employer OASDI shares through self-employment tax on their federal return. The IRS collects these amounts through quarterly estimated tax payments or with the annual return.
If you need to verify your lifetime OASDI earnings for benefit purposes, request a Social Security Statement from the SSA at ssa.gov/myaccount. The statement shows your yearly taxed earnings and an estimate of your future retirement, disability, and survivor benefits. This is general information, not tax advice.
Questions
What Is OASDI on Your Paycheck? FAQ
Is OASDI the same as Social Security?
Yes. OASDI (Old-Age, Survivors, and Disability Insurance) is the official name for Social Security. The terms are used interchangeably on pay stubs and tax forms. When you see OASDI or Fed OASDI/EE on your paycheck, it refers to the same 6.2% tax that funds retirement, survivor, and disability benefits administered by the Social Security Administration.
Why did my OASDI withholding stop mid-year?
Your year-to-date wages reached the annual wage base limit. For 2026, the cap is $184,500. Once your earnings hit that amount, your employer stops withholding OASDI for the rest of the calendar year. Withholding resumes automatically the following January when the counter resets. Your net pay increases for the remaining paychecks because the 6.2% deduction is no longer taken.
Do 401(k) contributions reduce my OASDI tax?
No. Traditional 401(k) deferrals lower your federal income tax wages but do not reduce your Social Security or Medicare wages. Your full gross pay, before the 401(k) deduction, is subject to OASDI. Section 125 cafeteria plan deductions for health and dental premiums, however, do reduce both your income tax and FICA-taxable wages.
What happens if two employers withhold OASDI and I exceed the wage base?
Each employer withholds OASDI independently, using only the wages it pays you. If your combined wages from both employers exceed $184,500 in 2026, you will overpay. Claim the excess Social Security tax when you file your federal return. Your employers do not coordinate withholding between them, so you must reconcile the overpayment yourself.
Can I opt out of paying OASDI?
Almost never. OASDI is mandatory for most W-2 employees. The few exemptions include members of approved religious groups who have received IRS approval, certain nonresident aliens on student or exchange visitor visas, and students employed by the school where they are enrolled. State and local government workers covered solely by a qualifying public pension plan may also be exempt.
How do OASDI contributions affect my future benefits?
Your OASDI payments earn you Social Security credits toward retirement, disability, and survivor benefits. You generally need about 40 credits, roughly 10 years of work, to qualify for retirement benefits. The amount of your future monthly benefit depends on your 35 highest-earning years. You can check your projected benefits at ssa.gov/myaccount.
Is OASDI tax deductible on my federal return?
Not for employees. The 6.2% withheld from your paycheck is not deductible on your income tax return. Self-employed individuals, however, can deduct the employer-equivalent portion of their self-employment tax as an above-the-line adjustment on their federal return, which reduces their adjusted gross income.
- Sources: IRS: Publication 15 (Circular E), Employer's Tax Guide (2026) · IRS: Topic No. 751, Social Security and Medicare Withholding Rates · SSA: Contribution and Benefit Base · IRS: General Instructions for Forms W-2 and W-3 (2026)
- Last updated September 22, 2026
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