How to deduct the OASDI on your payroll check or paycheck stubs in English

If you don’t understand check stubs in English, keep in mind that OASDI is old-age, disability, and survivor insurance commonly known as social security. Payment for these programs is carried out through a tax imposed by the United States government on earnings that are withheld by the employer.

So the deduction on your paycheck is a true reflection of the value that was withheld.

What is the deduction on check stubs in English?

For the payment of OASDI taxes, the deduction on check stubs in English always depends on the tax rate of the employee.

For example, before 2011 the rate was 6.2% and in this same year it was reduced to 4.2% and from that moment there were no changes in the rate reduction.

So, for example, if your paycheck is for $ 2,500, OASDI will retain $ 105, which corresponds to withholding by OASDI.

The limits of OASDI

OASDI has limits because the withholding is not applicable to your annual income on a specific amount, which is adjustable according to the inflation of each year.

Since 2011, when the withholding percentage was modified, the amount on which the OASDI tax is applicable was also established.

So the OASDI tax is calculated on an annual income that exceeds $ 160,800.

Those who pay the OASDI tax

When you receive a paycheck, the employer pays a portion of the OASDI tax on your behalf. On your income, the employer pays 6.2% on your behalf.

This part that your employer pays has nothing to do with your paycheck but is the cost that the company must pay for having employed you. For example, if your employer paid you $ 2,500, the company pays the government $ 155 for OASDI tax,

The OASDI deduction

The employer withholds federal income taxes from your paycheck separate from OASDI tax. Keep in mind that it is not possible that for an OASDI tax reduction you ask for deductions as you can with federal income tax and even your marital status does not influence.

A clear example is the filing of a joint and an individual return, since both work in the same way on the OASDI tax rate.

Payroll tax deductions in the US

About check stubs in English, if you want to calculate the deductions and withholdings of the paycheck …

The gross salary is the actual value that the employer owes the employee and the net salary is the value of the paycheck you receive as an employee.

How to calculate deductions

When calculating deductions, you should always use gross pay:

Step 1: Calculate the gross pay. The paycheck begins with the value of the gross salary, which is the total. If you are an employee, it is the annual value divided by the pay periods.

If you are an hourly employee, it is the value of the hours you worked for the rate including overtime.

Step 2: Calculate the value of the FIT withholding or federal income tax.

Step 3: Calculate your federal income tax withholding.

To know the withholding you must take into account the employee withholding assignment certificate, the W-4 form that you completed as an employee.

Step 3: Calculate Medicare and Social Security deductions. Deduct the paycheck taking into account that the value of the FICA is a tax of 15.3% of the gross salary.

The 7.65% is half of the total that is withheld from the paycheck and is the percentage paid by the employer.

Also keep in mind that the Social Security Administration imposes a limit per year on taxes, therefore it is not convenient to deduct many taxes on the higher income of the employee.

In the case of high-income employees, consider the Medicare tax deduction, which begins when the employee reaches the paid value determined for the year. 0.9% is the additional tax on the gross salary, which starts at different levels according to the status of the employee entered in the W-4 and the employer does not pay additional taxes.

Step 4: Determine your state income tax deductions. You should do your research so you can determine the value of these deductions and then submit them to the appropriate state or local tax authority.

OASDI and SSI Program Fees and Limits

When it comes to social security disability, survivors, and old-age insurance:

  1. Employees and employers pay 6.20%
  2. Medicare hospital insurance for both employees and employers is 1.45%
  3. The maximum taxable income is $ 127,200.
  4. Medicare hospital insurance has no limit.
  5. The required earning for the work credit is $ 12,300 for one-quarter of coverage.
  6. The maximum of four credits per year is $ 5,200.
  7. The annual value exempt from the earnings test is 16920 under the retirement age for the entire year.
  8. Per month before reaching full retirement age in the year is $ 44,880.
  9. From the month of maximum retirement age, there is no limit.
  10. If as a worker you retire at the total retirement age is $ 2,687.
  11. The retirement age is 66 years.
  12. Cost of living adjustment is 0.3%
  13. If you are self-employed, you pay a total of 15.3%: 2.9% for Medicare and 132.4% for OASDI.

However, it is a rate that does not include the additional 0.9% of Medicare taxes.

SSI

Individual: $ 735

Couple: $ 1103

Cost of living adjustment is 0.3%

Resource limit

Individual is 2000 dollars.

Couple: $ 3,000.

Monthly income exclusion

Earnings from work: $ 65

Unearned Income: $ 20

SGA for the non-disabled: $ 1,170.

The earned income exclusion is the first $ 65 of monthly earnings plus half of the remaining earnings.

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