Employees' OASDI Tax Rate for 2011 Lowered
On December 17, 2010 President Obama, signed into law the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010. Items included in the act will impact employees’ take home pay during the 2011 calendar year.
The act lowered the Old-Age, Survivors, and Disability Insurance (OASDI) tax rate for wages paid in 2011 to 4.2% from the previous rate of 6.2%. The employers' matching contribution rate will remain at 6.2%.
Employees subject to the OASDI tax should notice more take home pay in their paychecks. The rate change went into effect on the January 19, 2011 payday for biweekly employees and on February 1, 2011 for monthly employees.