Employers deduct the OASDI tax from employee wages when the employee is paid. Employers then retain this "withholding" and remit this amount along with other taxes due the government.

When determining the amount of withholding, the employer must consider the taxable wage base. Every year this amount is indexed. For 2018 the OASDI cap is $128,400.

In this first scenario, FICA Example's earnings to date plus current earnings have not exceeded the wage cap. Their current earnings are multiplied by 6.2%.

Note: In calculating the amount of FICA taxes to withhold from an employee's pay, the employer may disregard any fractional part of a cent, unless it is one-half cent or more, which must be rounded up.

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Note: Round to the nearest cent.

Paul Newman has earned to date $67,800 and current earnings of $3,729.00.

Employee: Paul Newman
Earnings to Date:	$67,800.00
Current Earnings:	$3,729.00
OASDI Withholding:	$

2.

OASDI: Scenario 2 Explanation

In this second scenario, FICA Example has earnings to date of $125,000 and current earnings of $8,000. To compute the proper withholding, combine the earnings to date ($125,000) and current earnings ($8,000) and then subtract the OASDI cap. This is the amount of wages ($4,600) which exceed the cap. This excess is subtracted from the current earnings ($8,000 - $4,600 = $3,400). It is this amount ($3,400) that is subject to the OASDI tax of 6.2%.

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Note: Round to the nearest cent.

Matt Damon has earned to date $122,600 and has current earnings of $6,743.

Employee: Matt Damon
Earnings to Date:	$122,600.00
Current Earnings:	$6,743.00
OASDI Withholding:	$

3.

OASDI: Scenario 3 Explanation

As previously stated, the employer must consider the taxable wage base when computing the OASDI portion of FICA. However, once the OASDI taxable wage base is exceeded, all payments made to the employee during the remainder of the year are not subject to FICA.

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Note: Round to the nearest cent and if an amount is zero, enter "0".

Anne Hathway has earned to date $195,000 and has current earnings of $14,625.

Employee: Anne Hathway
Earnings to Date:	$195,000.00
Current Earnings:	$14,625.00
OASDI Withholding:	$