Social Security Tax

The old-age, survivor's, and disability (OASDI) portion of the tax assessed on compensation and self-employment earnings under the Federal Insurance Contributions Act (FICA). The OASDI tax is 12.4% of earnings up to $72,600 (in 1999). An employer is required to withhold one-half of the tax (6.2%) from employee wages and to make a matching contribution of the remaining half. Employer-withheld and matching taxes are deposited at regular intervals with the IRS. Self-employed individuals pay the entire 12.4% tax, which they include with their quarterly estimated income tax payments. See Medicare Tax.