If you look closely at a paycheck stub or the statement that contains the information of a payroll check, you may notice an item or deduction item labeled “OASDI” and ask yourself what is OASDI? What does it mean?Well, OASDI is the acronym in English for “Old Age, Survivors and Disability Insurance”. In a paycheck, OASDI refers to taxes that are collected on personal income. These retained funds will be destined to finance the Social Security programs.
For payroll purposes, OASDI means a tax deducted from wages or salaries. One of the ” payroll tax ” deductions in the United States is required by law.
Part of the security system federal social, which is the responsibility of the Administration Social Security (SSA or Social Security Administration ).
Sometimes the OASDI payroll deduction can also be called a FICA tax.
FICA refers to the Federal Insurance Contributions Act, legislation that authorizes the federal government to collect this tax that finances social security in the US.
The OASDI, better known as Social Security, provides benefits to tens of millions of people in the United States. The Official Blog of the Social Security Administration explains what FICA is.
The OASDI program was created when President Franklin D. Roosevelt signed the Social Security Act on August 14, 1935.
Today, the Federal OASDI program provides monthly retirement benefits to those who reach full retirement age and assistance to the surviving children of deceased workers.
The OASDI also provides benefits to people with disabilities who are unable to work and earn enough to live.The program began as a modest effort to help older workers during the Great Depression. However, it has grown to become the largest system of its kind in the world. The Social Security Administration is responsible for Medicare health insurance as well as OASDI.
Together, they qualify as programs that provide a comprehensive benefits system for tens of millions of Americans.
As of 2018, the OASDI tax rate was 6.2 percent of earned income before deductions are subtracted.
For example, if an employee’s gross salary reaches $ 1,000 per month, then $ 62 is deducted from his total paycheck for OASDI.