The OASDI tax is your contribution to Social Security — Old-Age, Survivors, and Disability Insurance — and in 2026 it takes 6.2% of your wages up to a cap of $184,500. Your employer pays a matching 6.2% on top of your salary. Once your year-to-date earnings from a single employer cross that cap, the withholding stops for the rest of the calendar year and your take-home pay rises. OASDI is one half of FICA; the Medicare tax is the other half.
What OASDI Pays For
The money funds three kinds of Social Security benefits: monthly retirement payments to workers who qualify starting at age 62, survivors benefits paid to a deceased worker’s spouse, children, or dependent parents, and disability benefits for workers who can no longer perform substantial work because of a severe medical condition expected to last at least a year or result in death.1Social Security Administration. Annual Statistical Supplement, 2024 – Social Security Program Description and Legislative History
The 2026 Rate and Wage Base
The employee rate is 6.2%, and the employer pays another 6.2%, for a combined 12.4%. That rate is set by statute and has been unchanged since 1990.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
For 2026, the wage base is $184,500.3Social Security Administration. Contribution and Benefit Base The most you can pay as an employee this year is $11,439, which is 6.2% of that cap.
The cap applies only to OASDI. The Medicare portion of FICA — 1.45% from the employee and 1.45% from the employer — has no wage ceiling.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Above $200,000 in wages ($250,000 for married couples filing jointly), an extra 0.9% Additional Medicare Tax kicks in.4Internal Revenue Service. Topic No. 560, Additional Medicare Tax That surtax is separate from OASDI, but people often notice it around the same time OASDI stops.
What You Pay if You’re Self-Employed
Working for yourself means paying both halves. Under the Self-Employment Contributions Act, the full 12.4% OASDI rate applies to your net self-employment earnings, calculated on Schedule SE with your Form 1040.5Social Security Administration. What Are FICA and SECA Taxes?
Two rules reduce the sting. The tax applies to 92.35% of your net earnings, not 100%, which mirrors the fact that W-2 employees aren’t taxed on their employer’s share. And you can deduct half of your total self-employment tax when figuring adjusted gross income, which lowers your income tax.5Social Security Administration. What Are FICA and SECA Taxes? The $184,500 ceiling still applies to the OASDI portion; Medicare keeps running on every dollar above it.
Household Employers
If you pay a nanny, housekeeper, or caregiver $3,000 or more in cash wages during 2026, you become a household employer. You owe the 6.2% employer share and must withhold the employee’s 6.2% as well.6Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Below that threshold, no OASDI is owed on the wages.
Who Is Exempt
About 96% of U.S. jobs are covered by OASDI. A few narrow categories are not.
- Certain state and local government employees whose employer participates in a qualifying public retirement system that replaces Social Security. Coverage depends on whether the employer has a Section 218 Agreement with the SSA. If you’re a public employee and don’t see OASDI on your pay stub, this is usually why.7Internal Revenue Service. State and Local Government Employees Social Security and Medicare Coverage
- Members of recognized religious organizations conscientiously opposed to insurance benefits since before 1951, who can apply using Form 4029. The exemption is permanent and also waives all future Social Security and Medicare benefits.8Internal Revenue Service. Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
- Students employed by the school where they are enrolled at least half-time, when the work is tied to their educational purpose. Career employees and professional staff don’t qualify.9Internal Revenue Service. Student FICA Exception
- Nonresident aliens on F-1, J-1, or M-1 visas who have been in the U.S. for fewer than five calendar years, on wages tied to the purpose of the visa. Once you become a resident alien, the exemption ends.10Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes
Outside these categories, there is no opt-out. OASDI is mandatory for covered employment, and no individual election or hardship exception exists.
What Happens After You Hit the Cap
With a single employer, payroll automatically stops the 6.2% withholding once your year-to-date wages cross $184,500. The employer’s matching 6.2% stops at the same point. Your remaining paychecks for the year come out bigger.
Two or more W-2 jobs is where it gets messy. Each employer withholds 6.2% based only on what it pays you and has no visibility into your other wages. If your combined earnings cross $184,500, you’ll overpay OASDI.1Social Security Administration. Annual Statistical Supplement, 2024 – Social Security Program Description and Legislative History
You claim the excess back on your federal return. Line 11 of Schedule 3 (Form 1040) is labeled “Excess social security and tier 1 RRTA tax withheld,” and the overpayment is refundable — it either reduces your tax owed or comes back with your refund.11Internal Revenue Service. 2025 Schedule 3 (Form 1040) Additional Credits and Payments This only works when the overwithholding comes from two or more employers. If a single employer takes too much by mistake, you can’t use Schedule 3; the employer has to fix it, or you file Form 843 with the IRS.12Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld
One thing you cannot recover is the employer match. The second employer’s 6.2% on wages that pushed you over the cap isn’t refundable to you, and in most cases not to the employer either. Each employer’s obligation is computed independently.
Why the Cap Rises Each Year
The wage base is recalculated annually based on national average wage growth. It was $168,600 in 2024, $176,100 in 2025, and $184,500 in 2026.3Social Security Administration. Contribution and Benefit Base Benefits themselves received a 2.8% cost-of-living adjustment for 2026.13Social Security Administration. Cost-of-Living Adjustment (COLA) Information Each year’s higher cap means more of a high earner’s income runs through the 6.2%, and the maximum possible employee contribution moves up with it.