How to deduct OASDI from your paycheck or check?
How to deduct OASDI from your paycheck or check? If you don’t understand check stubs in English, keep in mind that OASDI is the old-age, disability, and survivor insurance commonly known as social security. The payment of these programs is carried out through a tax imposed by the United States government on earnings that are withheld by the employer.
So the deduction in your paycheck is a true reflection of the value that was withheld.
What is the deduction on check stubs in English?
For the payment of OASDI taxes, the deduction on the check stubs in English always depends on the employee’s tax rate.
For example, before 2011 the rate was 6.2% and in this same year it was reduced to 4.2% since then there have been no changes in the reduction of the rate.
So, for example, if your paycheck is for $2,500, OASDI will withhold $105, which corresponds to OASDI’s withholding.
The limits of OASDI
OASDI has limits because the withholding is not applicable to your annual income over a specific amount, which is adjustable according to inflation each year.
Since 2011, when the withholding percentage was modified, the amount on which the OASDI tax is applicable was also established.
Then the OASDI tax is calculated on an annual income that exceeds 160,800 dollars.
Who pays the OASDI tax?
When you receive a paycheck, the employer pays a portion of the OASDI tax on your behalf. On your income, the employer pays 6.2% on your behalf.
This part that your employer pays has nothing to do with your paycheck but is the cost that the company must pay for having employed you. For example, if your employer paid you 2,500 dollars, the company pays the government 155 dollars for the tax to the OASDI,