What Does Fed OASDI/EE Mean: Rate, Wage Cap, and Refunds

The FED OASDI/EE line on your pay stub is your share of the federal Social Security tax. It takes 6.2% of your gross wages, up to $184,500 in earnings for 2026, which caps your annual contribution at $11,439.¹ Your employer pays a matching 6.2% separately, but that cost never shows up on your stub.²

Breaking Down the Acronym

FED means the tax is federal, collected by the IRS rather than any state or city. OASDI is the government’s formal name for Social Security: Old-Age, Survivors, and Disability Insurance. EE stands for Employee Expense, so the line represents your portion of the tax, not your employer’s.²

A separate line labeled FED MED/EE usually sits nearby. That one is Medicare, withheld at 1.45% with no wage cap. If your wages pass $200,000 in a year ($250,000 for married couples filing jointly), an extra 0.9% Medicare surtax kicks in on the excess.³ OASDI has no equivalent surtax. It simply stops once your year-to-date wages pass the cap.

How Much Comes Out and When It Stops

Each pay period, your employer multiplies your gross wages by 6.2% and withholds that amount. The rate is set by federal statute and has not changed in decades.⁴ What changes each year is the wage base, the maximum amount of earnings the tax applies to. For 2026, that ceiling is $184,500.¹

Once your year-to-date earnings cross the cap, OASDI withholding stops for the rest of the calendar year. If you earn exactly $184,500 or more, the most you can pay is $11,439.¹ A worker earning $60,000 is below the cap all year, so the full salary is taxed. That comes out to $3,720 for the year, or about $143 per paycheck on a biweekly schedule.

A 401(k) Does Not Shrink the OASDI Line

Traditional 401(k) contributions lower your federal income tax withholding. They do not lower your OASDI tax. Social Security and Medicare taxes are calculated on your gross wages before any elective salary deferrals come out.⁵ If you earn $80,000 and defer $10,000 into a 401(k), your income tax is figured on $70,000, but OASDI still comes out of the full $80,000.

You Cannot Deduct It on Your Tax Return

The OASDI tax taken from a W-2 paycheck is not deductible on your federal return. Self-employed workers get to deduct the employer-equivalent half of their self-employment tax, but employees get no such write-off.⁶ The 6.2% reduces your take-home pay without reducing the income used to calculate your federal and state income taxes.

What You Get for the Money

Those three letters in OASDI line up with three categories of benefits:

Old-Age (retirement): monthly income for workers who have earned enough credits and reached at least age 62.
Survivors: payments to the spouses, children, and in some cases the parents of workers who die.
Disability: income for workers who become severely disabled before full retirement age and can no longer work.

Eligibility runs through work credits. In 2026, you earn one credit for every $1,890 in wages, with a maximum of four credits per year.⁷ Most workers need 40 credits, roughly 10 years of covered work, to qualify for retirement benefits. The money withheld goes into federal trust funds that are legally restricted to paying Social Security benefits and the program’s administrative costs.⁸

Can You Opt Out?

For almost every W-2 worker in the country, the answer is no. A few narrow exemptions do exist:

Students who work at the same school where they’re enrolled at least half-time may be exempt from FICA, as long as the job is incidental to the education and the student isn’t classified as a career employee with benefits like retirement eligibility or paid leave.⁹
Nonresident aliens in the U.S. on F-1, J-1, M-1, or Q-1 visas are exempt from OASDI on wages connected to the purpose of the visa, such as on-campus work or approved practical training. The exemption ends once they become resident aliens for tax purposes.¹⁰
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.¹¹

Refunds When Two Jobs Push You Over the Cap

If you work a single job, your employer tracks your year-to-date wages and stops OASDI withholding automatically once you reach $184,500. The problem shows up when you hold two or more jobs in the same year. Each employer only knows what it pays you, so each one may keep withholding OASDI on your full salary even after your combined earnings pass the cap.

You can claim the excess as a credit on your federal tax return. The overpayment goes on Schedule 3 of Form 1040 and either reduces your income tax or produces a refund.¹² No special form is required; the Form 1040 instructions walk through the calculation. Hold on to every W-2, because the IRS cross-checks the withholding reported by each employer. Only the employee side can be recovered this way. Each employer’s matching 6.2% is correct from that employer’s perspective, so the employer portion is not refundable to you.

1
Social Security Administration. Contribution and Benefit Base
2
Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
3
Internal Revenue Service. Topic No. 560, Additional Medicare Tax
4
Office of the Law Revision Counsel. 26 U.S. Code 3101 – Rate of Tax
5
Internal Revenue Service. Are Retirement Plan Contributions Subject to Withholding for FICA, Medicare, or Federal Income Tax
6
Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
7
Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
8
Social Security Administration. Old-Age and Survivors Insurance Trust Fund
9
Internal Revenue Service. Student FICA Exception
10
Internal Revenue Service. Aliens Employed in the U.S. – Social Security Taxes
11
Social Security Administration. Are Members of Religious Groups Exempt From Paying Social Security Taxes
12
Internal Revenue Service. Excess Social Security and RRTA Tax Withheld