Medicare Tax Rates (2024)
| Tax | Employee Rate | Employer Match | Wage Cap |
|---|---|---|---|
| Regular Medicare (HI) | 1.45% | 1.45% | None — applies to all wages |
| Additional Medicare Tax | 0.9% | No employer match | Starts at $200k (single) / $250k (MFJ) |
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The Additional 0.9% Medicare Tax
The Additional Medicare Tax was introduced by the ACA and applies to high earners. Key rules:
- Threshold by filing status: $200,000 (single/HoH/MFS) or $250,000 (married filing jointly)
- Employer withholds the extra 0.9% once your wages from that employer exceed $200,000—regardless of your filing status or other income
- Reconciled at filing: If you file MFJ with combined wages under $250,000, you get credit for over-withheld Additional Medicare Tax. If under-withheld (e.g., each spouse earns $150,000), you owe it at filing.
- Covers wages, self-employment income, and RRTA compensation — investment income is covered by the separate 3.8% NIIT
Real-World Example
You earn $220,000 in 2024 (single filer):
- Regular Medicare: $220,000 × 1.45% = $3,190
- Additional Medicare: ($220,000 − $200,000) × 0.9% = $20,000 × 0.9% = $180
- Total employee Medicare tax: $3,370
- Employer pays additional 1.45% on full $220,000 = $3,190 (no employer match on the 0.9%)
What Medicare Tax Funds
Medicare tax funds Medicare Part A (Hospital Insurance)—inpatient hospital care, skilled nursing facility care, hospice, and some home health services. Most people don't pay a premium for Part A because they (or a spouse) paid Medicare taxes for at least 10 years (40 quarters).
No wage base cap—ever
Unlike Social Security tax, Medicare tax never stops. Whether you earn $50,000 or $5,000,000, every dollar of wages is subject to the 1.45% Medicare tax. This is why Medicare tax continues to appear on your pay stub throughout the year even after Social Security withholding stops.