Ever look at your paycheck and wonder, “What’s this OASDI tax?” You’re not alone. If you run a small business in South Florida, this is one tax you need to understand. Don’t worry, we’ll keep it simple.

What Is OASDI?

OASDI means Old-Age, Survivors, and Disability Insurance. It’s part of Social Security. The money helps pay benefits to retired workers, people with disabilities, and families who lost a loved one.

Here’s what you need to know:

• 2024 rate for employees: 6.2%
• 2024 rate for employers: 6.2%
• Self-employed? You pay both, 12.4% total

Why Do You See It On Your Paycheck?

Every time you get paid, 6.2% goes to this tax. Your boss pays the same amount. If you’re self-employed, you pay the full 12.4%.

Example: You earn $1,000.

• $62 goes to OASDI.
• Your employer pays another $62.
• If you’re self-employed, you pay all $124.

What Does the Tax Pay For?

The money helps with:

• Retirement checks
• Disability aid
• Support for families of deceased workers

This is why you see “OASDI” on your pay stub. It’s your part of a national safety net.

Do You Have to Pay OASDI in Florida?

Yes.

Florida has no state income tax. But this federal tax still applies. If you own a small business, you need to:

• Take out 6.2% from each employee’s paycheck
• Match that amount as the employer
• Send both parts to the IRS

Learn more from this IRS guide.

2024 OASDI Tax Rates

Who Pays	Rate	Applies To	Max Income Taxed
Employees	6.2%	Wages	$168,600
Employers	6.2%	Wages	$168,600
Self-Employed	12.4%	Net Earnings	$168,600

Is There a Limit to the Tax?

Yes. For 2024, the tax only applies to the first $168,600 you earn. If you make more than that, the extra income isn’t taxed for OASDI. But Medicare still applies.

Get updates on limits from this IRS page.

Can You Get Out of Paying?

Not unless you’re in a very special group. Most people and businesses must pay. If you’re self-employed, you can deduct half when you do your taxes.

Common Questions

What is OASDI tax?

It’s a federal tax that pays for Social Security benefits like retirement and disability.

Why is it on my paycheck?

6.2% of your wages go to it. Your employer matches that.

Is it the same as Social Security tax?

Yes. OASDI is the official name for the Social Security tax.

Will it ever go away?

It’s been around for a long time. Unless the law changes, it’s here to stay.

Why It Matters to Your Business

If you mess this up, the IRS won’t be happy. You could face:

• Big fines
• Late fees
• Legal trouble

We help Florida businesses avoid these problems. Book your free appointment today.

Final Tips

Running a business isn’t easy. OASDI tax is just one piece of the puzzle, but it’s important. If you’d rather not deal with it, we’ve got your back.

JC Castle Accounting helps small business owners handle payroll, taxes, and everything in between.

You focus on your work. We’ll handle the rest.

Want more help? Visit our services page to see how we support Florida businesses.