OASDI stands for Old-Age, Survivors, and Disability Insurance, and it is a tax that funds the Social Security system in the United States. Here are the key points about OASDI on a paystub:
- Purpose: OASDI payments go to those who are retired, disabled, or have a spouse who earned Social Security benefits pass away.
- Tax Rate: The OASDI tax rate for employees and employers is set at 6.2% each, totaling 12.4%.
- Taxable Maximum: There is a limit to how much of your wages can be subject to OASDI taxes, called the taxable maximum. For 2023, the taxable maximum is $160,200.
- Self-Employed Individuals: Self-employed individuals pay the entire OASDI tax at a rate of 12.4%.
- Employer Contribution: Employers match the 6.2% OASDI tax deducted from employees pay and send it to the federal government to help fund Social Security.
- Benefits: OASDI tax funds Social Security benefits for retirees, their families, and Americans who are disabled.
In summary, OASDI on a paystub represents the tax contribution that funds the Social Security system, providing benefits to retirees, their families, and individuals with disabilities.
