OASDI tax basics: What is it and who pays it?

Your paycheck is full of technical jargon and acronyms. One of those acronyms on your paycheck is OASDI. Follow along as we specify the details.

What does OASDI stand for?

OASDI stands for Old-Age, Survivors and Disability Insurance.

And whether you know it or not, you’re probably paying OASDI tax, so it’s important to understand it. Follow along as we share the OASDI tax meaning, details about paying it, if you’re exempt from it, and how you can benefit from contributions later in life.

What is OASDI tax?

Let’s dive into the details of the OASDI meaning. You’ll often hear of OASDI and Medicare together as they are the two payroll taxes that make up FICA tax.

OASDI is the official name for Social Security, and it provides benefits to certain people who have lost their income. The OASDI program gives financial support to survivors of insured workers, retired or disabled workers, and their dependents. Now that we answered what OASDI is, you’re probably curious where it appears on your paycheck. OASDI taxes typically appear as a separate line item. You might see it listed as OASDI or Social Security.

How does OASDI tax work?

Tax law divides the responsibility to pay into the OASDI program between employer and employee. As a result, the OASDI tax on your paycheck is 6.2%, and your employer pays the other 6.2%. Together, OASDI and Medicare tax (FICA tax), amounts to 15.3%.

The OASDI tax rate has remained at the same rate for 30 years. However, the government can change the tax rate with new legislation.

OASDI limit 2025

OASDI tax applies to a limited amount of income. In tax year 2025, any income earned above $176,100 is not subject to OASDI tax, though it may still be subject to Medicare taxes, which do not have an income cap. The OASDI tax limit is also called the taxable maximum.

OASDI taxes for self-employed individuals

Self-employed individuals pay both employee and employer OASDI contributions: at 12.4%. Payments are made to the Social Security Administration via EFTPS.

Self-employed people can work with a tax pro to calculate and file tax withholdings, like OASDI. OASDI taxes can be paid through  quarterly estimated taxes.

While the self-employed pay higher OASDI tax rates, they can deduct half of OASDI tax paid on their tax returns.

Learn more about self-employment taxes and self-employed tax deductions.

OASDI FAQs

Is OASDI tax mandatory to pay?

Federal law requires all U.S. workers—employers, employees, and the self-employed—to contribute to the Social Security program, up to a certain income limit. Most workers must make OASDI contributions up to $176,100 in tax year 2025, up from $168,600 in tax year 2024.

Can I be exempt from OASDI taxes?

While most working individuals in the U.S. are required to pay OASDI taxes, certain groups are exempt. Here’s a breakdown of exemptions:

1. Members of certain religious groups: Followers of a recognized religious sect that opposes accepting Social Security benefits (like the Amish or Mennonites)
2. Certain non-resident aliens: Some non-resident aliens, such as students, scholars, and foreign government employees, may be exempt based on their visa type and the nature of their work in the U.S. For example, international students and researchers on temporary visas
3. Students employed by their school: Students working for their school may be exempt, but this generally applies to work directly related to their studies
4. Individuals with earnings below a certain amount: Self-employed individuals who earn less than $400 per year.

Note: Members of certain religious groups who may qualify for an exemption must meet specific requirements and waive the rights to the Internal Revenue Service (IRS). To request an exemption, you must fill out IRS Form 4029.

Is OASDI the same as Social Security tax?

Yes, OASDI is the same thing as Social Security tax. You might see it on your paycheck as OASDI or Social Security.

Can you get a refund if you overpay OASDI taxes?

You could get a refund if you overpay OASDI taxes. Overpayment can happen when you work two jobs, and the combined income exceeds the annual taxable amount. In this case, both employers may have withheld too much Social Security tax.

To correct this, claim the excess OASDI tax on IRS Schedule 3 (Form 1040).

How does OASDI taxes impact your retirement planning?

The more OASDI tax paid in your lifetime, the higher your future Social Security benefits could be. The Social Security Administration uses your highest 35 years of earnings to calculate your monthly payments.

Keep in mind: Starting to receive benefits early does come with a trade-off. If you start receiving Social Security benefits before your Full Retirement Age, your monthly payments will be smaller than if you were to wait.

Get help with filing your taxes

Need tax assistance? Whether you choose to file with a tax pro or file with H&R Block Online, you can rest assured that we’ll get you the biggest refund possible.