On February 18, 2012, the Senate passed a bill that extends the tax break on the employee portion of the Social Security Old-Age, Survivor and Disability Insurance tax (OASDI) through the end of 2012. The House of Representatives had passed the bill earlier in the week, and it is now awaiting signature by President Obama.

Last week, the House of Representatives and the Senate passed The Middle Class Tax Relief and Job Creation Act of 2012, which extends, for the remainder of 2012, the 2% payroll tax cut that is otherwise scheduled to expire at the end of February. The bill has not yet been signed by President Obama, but he has said that he will sign it.

Currently, the general rule is that employees and employers each pay Social Security OASDI tax[1] equal to 6.2% of the first $110,100 of the employee's wages. Self-employed individuals also pay 12.4% of their self-employment income up to $110,100 (equivalent to the 6.2% "employee" share plus the 6.2% "employer" share). In 2010, the employee share of the tax was reduced, for calendar year 2011 only, to 4.2% (total of 10.4% for self-employed individuals).

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