The line labeled FED OASDI/EE on your pay stub is your Social Security tax withholding. The acronym stands for Federal Old-Age, Survivors, and Disability Insurance / Employee Expense, and in 2026 it takes 6.2% of your wages up to $184,500 in earnings, for a maximum yearly withholding of $11,439.1Social Security Administration. Contribution and Benefit Base Your employer pays a matching 6.2% separately, which is why you won’t see that half anywhere on your stub.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
Breaking Down the Acronym
FED means the tax is federal, collected by the IRS rather than a state or local agency. OASDI is the government’s formal name for Social Security: Old-Age, Survivors, and Disability Insurance. Those three words map to the three categories of benefits the program pays. EE stands for Employee Expense, confirming this line is your share of the tax and not the portion your employer owes.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
You’ll often see a separate line labeled FED MED/EE right next to it. That one covers Medicare, the other half of the FICA tax system. Medicare is taxed at 1.45% with no wage cap, so it applies to every dollar you earn. If your wages exceed $200,000 in a calendar year ($250,000 for married couples filing jointly), your employer withholds an additional 0.9% Medicare surtax on the excess.3Internal Revenue Service. Topic No. 560, Additional Medicare Tax OASDI has no surtax; it simply stops once you hit the wage cap.
How Much Is Withheld
The math is straightforward. Your employer multiplies your gross wages by 6.2% and takes that amount out each pay period. The rate is set by federal statute and hasn’t changed in decades.4Office of the Law Revision Counsel. 26 U.S. Code 3101 – Rate of Tax What changes each year is the wage base limit, the ceiling on earnings subject to the tax. For 2026, that ceiling is $184,500.1Social Security Administration. Contribution and Benefit Base
Once your year-to-date earnings pass $184,500, withholding for OASDI stops for the rest of the calendar year. A worker who hits or exceeds that cap pays the yearly maximum of $11,439. For someone earning $60,000, the full salary is taxed all year, producing a total OASDI bill of $3,720. On a biweekly pay schedule, that’s roughly $143 per paycheck.
Your 401(k) Doesn’t Reduce It
Traditional 401(k) contributions lower your federal income tax withholding, but they do not lower your OASDI. Social Security and Medicare taxes are calculated on your gross wages before any elective salary deferrals are subtracted.5Internal Revenue Service. Are Retirement Plan Contributions Subject to Withholding for FICA, Medicare, or Federal Income Tax So if you earn $80,000 and defer $10,000 into a 401(k), your income tax is calculated on $70,000, but your OASDI is still calculated on the full $80,000.
And It Won’t Reduce Your Taxable Income
The OASDI you pay as a W-2 employee isn’t deductible on your federal income tax return. The 6.2% coming out of your check has no effect on the income figure used to calculate your federal or state income taxes.6Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) It reduces your take-home pay and nothing else.
What You Get for Paying It
OASDI benefits fall into three categories, matching the three words in the acronym:
- Old-Age (Retirement): monthly income for workers who have earned enough work credits and reached at least age 62.
- Survivors: payments to the spouses, children, and in some cases parents of workers who die.
- Disability: income for workers who become severely disabled before full retirement age and can no longer work.
The withholding doesn’t sit in a personal account with your name on it. It flows into federal trust funds that are legally restricted to paying Social Security benefits and the program’s administrative costs.7Social Security Administration. Old-Age and Survivors Insurance Trust Fund Eligibility depends on accumulating work credits over your career.8Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
The Half You Don’t See
OASDI is part of the Federal Insurance Contributions Act (FICA), which requires equal contributions from employer and employee. Your employer pays 6.2% on the same wages up to the same $184,500 cap, bringing the combined contribution to 12.4%.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The employer’s share is a business expense owed separately, so it never appears on your stub. On $100,000 in wages, you pay $6,200 and your employer pays another $6,200, for $12,400 flowing into the trust funds from that one worker’s earnings.
If you’re self-employed instead of a W-2 employee, you owe both halves through the self-employment tax, and the same $184,500 wage base applies to the OASDI portion.6Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Who Can Skip It
Most W-2 workers cannot opt out of OASDI. A few narrow exemptions exist:
- Students employed by their school. If you’re enrolled at least half-time and working at the same college or university where you’re a student, your wages may be exempt from FICA as long as the job is incidental to your education and you aren’t classified as a career employee with benefits like retirement plan eligibility or paid leave.9Internal Revenue Service. Student FICA Exception
- Certain nonresident aliens. Students, scholars, and trainees in the U.S. on F-1, J-1, M-1, or Q-1 visas are exempt on wages tied to the purpose of the visa, such as on-campus work or approved practical training. The exemption ends if they become resident aliens for tax purposes.10Internal Revenue Service. Aliens Employed in the U.S. – Social Security Taxes
- Members of certain religious groups. Members of recognized religious sects that have provided for their own dependents continuously since 1950 (including some Amish and Mennonite communities) can apply for an exemption by filing Form 4029. Approval requires waiving all rights to Social Security and Medicare benefits.11Social Security Administration. Are Members of Religious Groups Exempt From Paying Social Security Taxes
Outside these categories, the tax is mandatory for virtually every W-2 worker in the country.
Getting Back Excess OASDI From Multiple Jobs
With a single job, your employer stops withholding automatically once you hit $184,500. The problem shows up when you hold two or more jobs in the same year. Each employer tracks only the wages it pays you, so both may keep withholding OASDI on your full salary even after your combined earnings pass the cap.
You can claim the overpayment as a credit on your federal tax return. It goes on Schedule 3 of Form 1040 and reduces your income tax or generates a refund.12Internal Revenue Service. Excess Social Security and RRTA Tax Withheld No special form is needed; the Form 1040 instructions walk through the calculation for excess Social Security tax. Keep all your W-2s, since the IRS cross-checks the withholding reported by each employer. Only the employee side is recoverable this way. Each employer’s matching 6.2% is correct from their perspective, so the employer portion isn’t refundable to you.