What Is Oasdi Tax? OASDI tax is an acronym of Old-Age, Survivors, and Disability Insurance tax. It is a component of the U.S. program of Social Security and this is paid out of the paycheck of an employee. The tax is an employer and employee contribution which is split half and half on the amount of wages each must pay up to an annual defined limit. OASDI tax is used to cover the benefits of retired people, disabled persons, and the surviving dependents of the workers who have died. It plays a crucial role to ensure income security in the U.S. social safety net and assist as financial protection in the course of retirement or when disabled or died.