What is the OASDI tax?

The OASDI tax, commonly referred to as Social Security, is a tax that is withheld by employers from their employees' earned income. The United States government requires this tax in order to pay for Social Security programs. OASDI stands for old age, survivor and disability insurance.

As of 2014, the employer and the employee each pay 6.2 percent of the employee's earned income as OASDI tax. However, there is a limit on the amount of earnings that can be taxed. As of 2014, the limit is $117,000 of earned income. Any amount earned above that is not charged the OASDI tax. OASDI tax is separate from federal income tax withholding, which an employer is also required to withhold from an employee's paycheck.