Calculating OASDI

This diagram illustrates the flow of the OASDI calculation:

This diagram illustrates the flow of the OASDI calculation.

The system calculates OASDI employee tax as a deduction (OASDI EE) using the formula TAX FM OAS EE. The system includes this deduction in the net pay calculation. The calculations are based on a set of variables that store key values such as gross limits, tax rates, and payment limits for OASDI. Year-to-date OASDI tax for a payee is stored in the OASDI EE YTDA accumulator. The system then refers to this accumulator to enforce the yearly OASDI limit during calculation.

The system calculates OASDI employer tax as a deduction (OASDI ER) using the formula TAX FM OAS ER. Because this deduction applies only to employers, the system does not include it in net pay calculation. The system stores year-to-date OASDI employer tax in an accumulator (OASDI ER YTDA), just as it does for year-to-date OASDI employee tax. Likewise, the system uses the accumulator to enforce yearly limits on OASDI employer tax.