How to Deduct OASDI Taxes from Wages

How to Deduct OASDI Taxes from Wages
••• Comstock/Comstock/Getty Images

Old Age, Survivors, and Disability Insurance, also called OASDI or the Social Security, refers to money your employer takes out of your paycheck to cover the tax for the program. By paying into the program, you earn credits toward qualifying for retirement benefits. In addition, the more wages you pay OASDI taxes on, the higher your benefit will be at retirement. However, it's not always a simple calculation: only a certain amount of your annual wages are subject to OASDI taxes, but that amount changes each year.

Calculate the sum of your wages from your employer for the year. If you've already exceeded the OASDI wage base for the year, you won't have any OASDI taxes deducted from your paycheck. For example, in 2013 the OASDI wage base is $113,700. So, if you've already earned $115,000 before this paycheck none of your paycheck is withheld for OASDI taxes. If you earned $110,000 and received another $5,000 in wages, only the first $3,700 would have OASDI taxes deducted.

Divide the employee OASDI rate by 100 to convert to a decimal. For example, in 2013, the OASDI rate is 6.2 percent. So, divide 6.2 percent by 100 to get 0.062.

Multiply the OASDI rate as a decimal by the portion of your paycheck subject to OASDI taxes to figure how much will be withheld. For example, of $3,700 of your paycheck is subject to OASDI taxes, multiply $3,700 by 0.062 to find that $229.40 will be deducted for OASDI taxes.


  • OASDI taxes, along with Medicare taxes, that are withheld from your paycheck won't reduce the amount of personal income tax you owe when you file your tax return.