NOT TAX ADVICE: The OASDI tax is mechanical but interacts with cross-state work, multiple employers, equity compensation, and self-employment in non-obvious ways. This is an informational walkthrough current to 2026; consult a licensed CPA or enrolled agent for your specific situation.
Federal rules: OASDI under 2026 payroll tax law
OASDI stands for Old-Age, Survivors, and Disability Insurance — the formal name of the program funded by the larger of the two payroll taxes collectively called “FICA” (Federal Insurance Contributions Act). The tax is imposed on employees under Internal Revenue Code §3101(a) and on employers under IRC §3111(a), each at 6.2 percent of wages up to the annual contribution and benefit base set by the Social Security Administration. Self-employed individuals pay the full 12.4 percent (both sides combined) under IRC §1401(a).
The 2026 OASDI wage base is $184,500 per the SSA Contribution and Benefit Base announcement, up from $176,100 in 2025. Earnings above the wage base are not subject to OASDI tax, though the separate 1.45 percent Medicare hospital insurance tax under IRC §3101(b) continues with no wage cap and an additional 0.9 percent under IRC §3101(b)(2) kicks in for wages over $200,000 (single) or $250,000 (MFJ). The wage-base cap also caps the future Social Security benefit calculation; wages above the base do not increase the worker's primary insurance amount (PIA).
OASDI is reported by employers on Form 941 quarterly and reconciled to W-2 Box 4 annually. Form W-2 Box 3 reports OASDI taxable wages (capped at $184,500 in 2026); Box 4 reports the 6.2 percent employee tax withheld. Self-employed individuals compute OASDI on Schedule SE (Form 1040), reporting net earnings from self-employment on which the 12.4 percent OASDI portion of self-employment tax is calculated.
State-by-state quick reference: state-equivalents of OASDI
OASDI itself is purely federal. Several states impose parallel state-level wage taxes that look superficially similar but fund different programs (disability, paid family leave, state unemployment, in two cases state-only Social Security supplements):
| State | State-level wage tax | 2026 cap / rate |
|---|
| California | SDI (State Disability Insurance) | No cap; 1.20% employee 2025 rate (2026 rate TBA by EDD) |
| New York | DBL (Disability) and PFL (Paid Family Leave) | DBL: $0.60/week; PFL: 0.388% on first $91,373 (2025 figures) |
| New Jersey | TDI, FLI | TDI 0% employee 2025; FLI 0.33% on first $165,400 (2026 figures) |
| Rhode Island | TDI | 1.2% on first $89,200 (2025) |
| Hawaii | TDI | 0.5% on first $1,338.78/week wages (2025) |
| Washington | Paid Family and Medical Leave | 0.71% on wages up to OASDI base (split 0.4655% ee + 0.2455% er for 2024) |
| Massachusetts | PFML | Up to 0.88% on wages up to OASDI base; employee share varies |
| Connecticut | CT Paid Leave | 0.5% on wages up to OASDI base (employee only) |
| Oregon | Paid Leave Oregon | 1.0% on wages up to $176,100 (60% ee / 40% er for employers of 25+) |
| Colorado | FAMLI | 0.9% on wages up to OASDI base (split 50/50 for employers of 10+) |
| Delaware | Healthy Delaware Family Leave | 0.32%-0.8% depending on employer size; effective 2026 |
| Maine | Paid Family and Medical Leave | 1% on wages up to OASDI base, effective 2026 contributions |
| Minnesota | Paid Leave | 0.7% on wages up to OASDI base, effective 2026 |
How to calculate 2026 OASDI — worked example
Scenario: Single filer, two W-2 jobs in 2026. Job A pays $120,000 annual salary; Job B pays $90,000 annual salary. Total combined W-2 wages = $210,000.
- Each employer applies the OASDI cap independently. Job A withholds 6.2% on the full $120,000 = $7,440. Job B withholds 6.2% on the full $90,000 = $5,580. Each employer is required by Pub 15 to apply the cap to its own wages only; there is no inter-employer coordination.
- Total OASDI withheld. $7,440 + $5,580 = $13,020 across both jobs.
- Calculate the OASDI maximum. 2026 cap is $184,500 × 6.2% = $11,439.00.
- Excess OASDI = $13,020 − $11,439 = $1,581. This excess is claimed as a refundable credit on Form 1040 Schedule 3 line 11 (excess Social Security tax withheld). The IRS refunds the excess as part of the normal refund or applies it against tax owed.
- Medicare tax. 1.45% × $210,000 = $3,045 employee Medicare. No cap, no excess refund concept.
- Additional Medicare 0.9%. $210,000 − $200,000 single threshold = $10,000 above threshold. $10,000 × 0.9% = $90. Each employer only withholds Additional Medicare after the employee crosses $200,000 with that employer alone, so neither employer withheld any Additional Medicare here. The $90 is owed on Form 1040 via Form 8959.
- Final reconciliation. Excess OASDI refund $1,581 minus Additional Medicare owed $90 = net $1,491 refund attributable to the multi-employer payroll situation.
When to consult a CPA or enrolled agent on OASDI
For a single-job W-2 employee with wages under the OASDI cap and no self-employment income, OASDI requires no planning — the employer's payroll system handles it. A professional engagement is not necessary for the OASDI calculation alone.
Professional review becomes valuable when any of the following apply: two or more jobs with combined wages near or above the cap; transitioning from W-2 to self-employment (or vice versa) mid-year; equity compensation (RSU, ISO, NSO) vesting that creates W-2 wages exceeding the cap; an S-corporation owner-employee setting reasonable compensation; household-employer obligations under Schedule H; or treaty-based exemption questions for nonresident workers under IRC §3121(b)(19). The downside risk of getting OASDI wrong is reclassification audits, Additional Medicare tax penalties, and in S-corp scenarios full FICA reassessment on prior years. Mustafa Bilgic, sole proprietor of PayrollCalculator.us, is not a CPA, EA, or licensed tax preparer; this is educational reference current to 2026 only.
FAQ — OASDI tax 2026
What does OASDI stand for?
Old-Age, Survivors, and Disability Insurance. It is the formal name of the larger of the two payroll taxes collectively known as FICA, funding Social Security retirement, survivor, and disability benefits administered by the Social Security Administration.
What is the 2026 OASDI rate?
6.2% for the employee under IRC §3101(a) and 6.2% for the employer under IRC §3111(a). Self-employed individuals pay the full 12.4% under IRC §1401(a). The rate has been 6.2% (employee) since 1990.
What is the 2026 OASDI wage base?
$184,500, up from $176,100 in 2025. The Social Security Administration announces the new wage base each October based on the National Average Wage Index.
Why is there a wage cap on OASDI but not on Medicare?
Medicare hospital insurance funding does not have a benefit-formula linkage; the program is structured to use general taxation of all wages. OASDI is tied to a benefit formula capped at the wage base, so taxing wages above the cap would not increase benefits and Congress capped it accordingly.
How is OASDI different from Medicare tax?
OASDI is 6.2% capped at $184,500 (2026); Medicare is 1.45% with no cap plus an extra 0.9% over $200K single/$250K MFJ. OASDI funds retirement, survivor, and disability benefits; Medicare funds hospital insurance (Part A).
What if my OASDI was over-withheld?
If a single employer over-withheld (payroll error), request a refund from the employer first using Form 843. If two or more employers combined withheld more than the cap (because each correctly capped its own wages but the worker had wages above the cap across employers), claim the excess on Form 1040 Schedule 3 line 11.
Do I pay OASDI on a Roth 401(k) contribution?
Yes. All 401(k) contributions (traditional or Roth) are subject to OASDI and Medicare taxes. Only traditional 401(k) contributions reduce federal income tax withholding; both reduce neither FICA nor state SDI/PFL.
Are tips subject to OASDI?
Yes. Tips are wages under IRC §3121(a)(7) and are subject to OASDI and Medicare. Employees report tips of $20 or more per month to the employer on Form 4070, and the employer withholds OASDI and Medicare. Unreported tips are reported on Form 4137 by the employee.
Do household employers pay OASDI?
Yes, if cash wages to any one employee reach the 2026 Schedule H threshold ($2,800). The employer pays both halves (12.4% OASDI) via Schedule H attached to Form 1040, not via Form 941.
How is OASDI different for self-employed?
Self-employed individuals pay 12.4% OASDI on 92.35% of net Schedule C earnings, capped at the wage base. They deduct one-half of SE tax above the line on Form 1040 Schedule 1.
Can I opt out of OASDI?
Generally no. Narrow exceptions exist for certain religious-order members (IRC §3121(b)(8)), self-employed members of religious sects that oppose insurance benefits (Form 4029), some nonresident alien students (IRC §3121(b)(19)), and a few state/local government employees in noncovered employment.
Does the PayrollCalculator.us calculator handle the OASDI cap?
Yes. The federal payroll engine applies the $184,500 OASDI cap, the 1.45% Medicare rate, and the 0.9% Additional Medicare threshold. For multi-employer scenarios the calculator flags the excess OASDI refund claim on Schedule 3.