An employee’s check stub should state his gross and net pay, plus various taxes withheld such as Federal, State and Medicare. In addition, an employee may notice the abbreviations OASDI reflected on his check stub.
Meaning
OASDI means Old-Age, Survivors and Disability Insurance. OASDI is often reflected on employees’ check stubs as Social Security.
Regulation
The Federal Insurance Contributions Act (FICA) regulates OASDI and Medicare payroll taxes. FICA taxes are used to pay for Social Security and Medicare benefits.
Employee Withholding
Employers must withhold 6.2 percent of their employees’ gross (before taxes) wages up to the annual limit—$106,800 for 2010—for OASDI taxes.
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Employer Match
The employer is required to pay a matching amount of 6.2 percent for OASDI taxes.
Overpayment
If you paid more than the annual limit (e.g., if you had more than one job) in OASDI taxes, you can claim a refund when you file your federal tax return with the IRS.
References
Photo Credits
- Image by Flickr.com, courtesy of Gopal Aggarwal