OASDI Tax Calculator

OASDI 2026 Rates and Wage Base

OASDI tax = 6.2% employee + 6.2% employer = 12.4% combined. 2026 wage base limit: $176,100 (up from $168,600 in 2025). Above the wage base, no additional OASDI applies. Medicare tax (1.45% + 0.9% surtax over $200K) has NO wage base — applies to all wages. The wage base resets each calendar year — high earners hit the cap mid-year and see paycheck increase.

Self-Employment Tax (SE Tax) — Pay Both Sides

Self-employed pay 12.4% OASDI + 2.9% Medicare = 15.3% SE tax on net self-employment earnings. Compute on Schedule SE. Deduction: employer-equivalent half (50% of SE tax) is above-the-line income tax deduction. Net effective SE tax rate: about 14.13% accounting for the deduction. Significant for 1099 contractors, freelancers, sole proprietors not on S-corp salary.

S-Corp Salary Trick — Legitimate Tax Planning

Switch from sole proprietor to S-corp election: pay yourself reasonable salary (subject to OASDI + Medicare) and take remainder as distribution (no SE tax). Example: $200K profit. Sole prop: $200K × 14.13% = $28K SE tax. S-corp with $80K salary: $80K × 7.65% × 2 = $12K SS/Medicare. Savings: $16K/yr. Must pay 'reasonable salary' — IRS audits aggressive low salaries (rule of thumb: 50%+ of profit on services, less on capital-intensive businesses).

The Wage Base Bump and Take-Home Surge

Employee earning $300K: hits $176,100 wage base at month ~7 (assuming roughly even pay). Last 5 months of year, OASDI stops withholding — paycheck jumps about 6.2% net. Many high earners forget this and don't adjust extra savings or withholding. Pro tip: use the wage base bump months to max 401(k), increase emergency fund, or pay down debt — temporary higher net take-home should not become temporary higher spending.

Sources: SSA 2026 Wage Base announcement, IRS Pub 15, IRC §3121. Last updated: May 2026. Not tax advice.