Business & Finance Taxes

How to Determine the OASDI Tax

By Business & Finance Last updated Thursday, May/09/2024

1). Research the current OASDI tax rates for employees, the OASDI income cap and, if self-employed, employers on the Social Security Administration website. In 2011, the employee rate equals 4.2 percent, the income cap equals $106,800 and the employer rate equals 6.2 percent.
2). Add the employee rate to the employer rate if you are self-employed to find your OASDI rate. If you are an employee, simply use the employee rate.
3). Divide your OASDI rate by 100 to change it to a decimal. In 2011, that means the employee rate equals 0.042 and the self-employment OASDI rate equals 0.104.
4). Multiply your OASDI rate by the smaller of your salary or the annual limit, which equals $106,800 as of 2011, to find your OASDI tax. For 2011, if you are an employee making $60,000, your OASDI tax equals $2,520. If you are self-employed making the same amount, your OASDI tax equals $6,240.

Stay informed and read the latest news today from The ThatBiz Online, the definitive source for independent journalism from every corner of the globe.