Determine the OASDI tax rate for the year. For 2010, the rate was 6.2 percent of the employee's gross income, up to the annual wage limit of $106,800. Use the IRS' Circular E for the appropriate tax year to find the rate.
Calculate the tax. For example, say the employee earns $500 weekly. Calculate as follows: $500 x .062 = $31. Therefore, $31 would be withheld weekly for OASDI taxes.
Stop the deduction once the employee meets the yearly wage limit. If you use payroll software, the system stops the withholding automatically. If you process your payroll manually, you must keep track of the employee's deduction. For example, once the employee has earned $106,800 for year 2010, cease his OASDI withholding and resume it at the start of the next year.
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|South Carolina||South Dakota||Tennessee|