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Tax Tip Tuesday: Tip #50, SSA Announced 2021 OASDI Tax Increase

November 03, 2020

The Social Security Administration (SSA) announced that the maximum amount of wages subject to the old age, survivors, and disability insurance (OASDI) tax will increase to $142,800 in 2021 from $137,700 in 2020. The OASDI tax rate is 6.2%, so an employee with wages up to or above the maximum in 2021 will pay $8,853.60 in tax, with the employer paying an equal amount. Self-employed individuals pay tax at a 12.4% rate up to the limit, for a $17,707.20 maximum amount of OASDI tax.

The Medicare hospital insurance tax of 1.45% each for employees and employers, or 2.9% for the self-employed, has no wage limit.

For more information, contact Gail Iverson at (770) 287-7800 or giverson@rushtonandcompany.com. Stay tuned for more tax tips or follow them on our social media accounts every #TaxTipTuesday!