Why Did My FICA-OASDI Taxes Increase in 2013?

by Michael on Jan 21, 2013 · 4 comments

Photo of a Payroll Payment Advice Form (Paycheck)

A reader recently wrote in to ask why his FICA-OASDI taxes increased in 2013. The answer, of course, is that the “payroll tax cut” expired.

The payroll tax cut, which was enacted in 2011 to help stimulate the sputtering economy, reduced your FICA-OASDI (i.e., Social Security) obligation from 6.2% to 4.2%.

Though it was set to expire at the end of 2011, the payroll tax cut was ultimately extended through 2012. But that was the end of the road, as it was allowed to expire amidst the fiscal cliff negotiations.

So… This means that your paycheck will be a bit smaller in 2013. For those earning a median household income of $50k/year, we’re talking about roughly $80/month.

1 Evan January 21, 2013 at 9:58 pm

I know you aren’t commenting on the move, but I couldn’t believe that this temporary cut was ever approved! You have a program that is barely stable and you are going to send LESS money to it! Crazy

2 Michael January 21, 2013 at 10:04 pm

Evan: I agree. How often do we hear about Social Security’s financial problems, and yet… Let’s cut payroll taxes! Doesn’t make a lot of sense.

3 Bill January 31, 2013 at 1:18 pm

You guys (Evan and Michael) are ridiculous. You think that the SS money is going to be there when you retire? The system is failing. We’re paying into a system that spends more than it makes. The only viable solution is for the government to stop spending so much money. The politicians can’t manage the money, so why would I want them to manage more of mine?

4 Evan February 1, 2013 at 12:13 am

I don’t know if you misinterpreted my comment but I don’t think the program is viable in its current form. Do I believe that SS will be there? 100%. If not there will literally be riots, which we don’t have too often in America but it won’t be in the current form.

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