OASDI tax stands for Old Age, Survivors, and Disability Insurance tax, which is a tax on earned income that is used to fund Social Security and Medicare programs in the United States.
The OASDI tax is a payroll tax that is paid by both employees and employers, and it is based on a percentage of an employee's gross income. As of 2021, the OASDI tax rate is 6.2% for employees and 6.2% for employers, for a total rate of 12.4%.
The OASDI tax applies to earned income up to a certain amount, known as the Social Security wage base. As of 2021, the Social Security wage base is $142,800, which means that any income earned above this amount is not subject to the OASDI tax.
The funds collected through the OASDI tax are used to provide benefits to retirees, their surviving spouses and children, and people with disabilities, as well as to fund the Medicare program that provides healthcare benefits to people over the age of 65 and those with certain disabilities.
Is OASDI tax mandatory?
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