- The OASDI tax applies to all earned income, including your paychecks and bonuses. The Internal Revenue Service does not subject unearned income, such as dividends or interest, to OASDI tax.
- The OASDI tax rate is 12.4 percent as of 2010, and has not changed since 1990. If you work as an employee, your employer splits the tax with you, so each party pays 6.2 percent.
- The OASDI tax pays for benefits to people who have suffered disabilities or retired after accumulating enough work credits to qualify for retirement payments.
- The federal government first implemented the OASDI tax in 1937 at a rate of 1 percent.
- By paying the OASDI tax, you accumulate work credits at a rate of up to four per year. As of 2010, each $1,120 that you pay in OASDI taxes on earns one credit. You need at least 40 credits to be eligible for retirement benefits.
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