What is the OASDI Wage limit for the year 2016?

The OASDI (Old-Age, Survivors, and Disability Insurance) wage limit for the year 2016 was set at $118,500. This figure represents the maximum amount of an individual's earnings that is subject to the Social Security tax. It's important to note that the wage limit for OASDI tends to change annually based on adjustments to the national wage index.

Understanding the significance of this wage limit is crucial for both employers and employees, as earnings exceeding this threshold do not contribute further to the Social Security benefits calculation. Thus, employees earning above this limit in 2016 would not see additional deductions for Social Security tax on those earnings, making it an important figure for payroll calculations.

This context highlights that the OASDI wage limit reflects federal policies aimed at balancing contributions to and benefits from the Social Security system.