What Is an OASDI Deduction?


Quick Answer

The Old-Age, Survivors, and Disability Insurance program is a Social Security tax deducted from paychecks. The Federal Insurance Act allows OASDI to combine with the Medicare Hospital Insurance program and form the FICA tax, according to USA.gov.

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Full Answer

The OASDI only taxes income prior to limits set based on the national average wage index. An employer and an employee each pay half of an OASDI deduction, but a self-employed taxpayer is liable for both the employee and the employer portion of the tax, explains the U.S. Social Security Administration.

As of 2015, there is no limit placed on taxable wages for the Medicare portion of the FICA tax. The Medicare rate is 1.45 percent for an employed taxpayer and 2.9 percent for a self-employed taxpayer, reports the SSA. Medicare tax contributions were not without limit prior to 1993.

The contribution rate for OASDI has remained 6.2 percent for employees and 12.4 percent for self-employed taxpayers since 1990, notes USA.gov. From 2011 to 2013, employees and self-employed taxpayers received a 2 percent reduction. Most employers were not liable for paying OASDI in 2010, notes Social Security.

When income is greater than $200,000 for individuals and $250,000 for married couples the Medicare tax increases 0.9 percent, according to Social Security.

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