Medicare tax withholding is a fixed percentage of your wages
Medicare tax is withheld from your paycheck at a rate of 1.45% of your gross wages. Your employer withholds this amount and sends it to the federal government on your behalf. If you are self-employed, you pay both the employee and employer portions, for a total of 2.9% of your net self-employment income.
There is no income limit on Medicare tax — it applies to all wages, no matter how much you earn. This is different from Social Security tax, which stops after you reach a certain income threshold each year. Once you turn 65 and enroll in Medicare, the withholding continues if you keep working.
If your income is very high, you may owe an additional 0.9% Medicare tax on wages above a certain amount. For 2024, this additional tax applies to wages over $200,000 for single filers and $250,000 for married couples filing jointly. Your employer should withhold this extra amount automatically if your wages cross that threshold.
Key Takeaways
- Medicare tax is withheld at 1.45% of your wages, and your employer matches this amount.
- Self-employed workers pay 2.9% of net self-employment income in Medicare tax.
- Medicare tax has no income cap — it applies to all your wages, unlike Social Security tax.
- An additional 0.9% Medicare tax applies to high earners, with thresholds that vary by filing status.
- Medicare tax withholding continues even after you turn 65 and enroll in Medicare if you remain employed.
Where Medicare tax appears on your pay stub
Your pay stub shows Medicare tax as a separate line item, usually labeled "Medicare Tax" or "Med Tax." The amount withheld appears in the deductions section. Next to it, you will see your employer's matching contribution listed separately — employers must pay an equal 1.45% on your behalf, though this does not come from your paycheck.
If you have multiple jobs, each employer withholds Medicare tax independently on the wages they pay you. There is no coordination between employers, so if you earn high wages at two jobs, you may end up paying more than you owe. You can correct this when you file your tax return by claiming a credit for the overpayment.
Your W-2 form, which you receive each January, shows the total Medicare tax withheld during the year in Box 6. This figure should match what you see across all your pay stubs combined.
How self-employed workers pay Medicare tax
If you are self-employed, you pay Medicare tax as part of your self-employment tax when you file your annual tax return. You calculate this on Schedule SE (Self-Employment Tax), which is part of Form 1040. The rate is 2.9% of your net self-employment income — the income from your business after you subtract business expenses.
Self-employed workers do not have an employer to match their contribution, so you pay both sides yourself. However, you can deduct half of your self-employment tax as an adjustment to income on your tax return, which reduces your taxable income slightly.
If your net self-employment income is high enough, you also owe the additional 0.9% Medicare tax. You calculate this on Form 8959 (Additional Medicare Tax) and include it with your tax return.
Medicare tax and your Medicare benefits
Medicare tax you pay during your working years does not create a personal account or determine your Medicare benefits. Instead, the money goes into a general fund that pays for current Medicare beneficiaries' care. Your Medicare benefits at age 65 are based on your age and enrollment status, not on how much tax you paid.
You do not need to have paid a certain amount of Medicare tax to enroll in Medicare Part A (hospital insurance) at age 65. However, if you have not worked long enough to may have access to for Social Security benefits, you may have to pay a premium for Part A, even though most people age 65 and older do not.
Continuing to work and pay Medicare tax after age 65 does not increase your Medicare benefits. Your benefits are set once you enroll and do not change based on future earnings or tax payments.
What happens if you overpay Medicare tax
If you work multiple jobs and your combined wages exceed the high-income threshold, you may overpay the additional 0.9% Medicare tax. For example, if you earn $180,000 at one job and $80,000 at another (totaling $260,000), each employer withholds the extra 0.9% on their portion, even though only $60,000 of your total income is subject to it.
You cannot recover this overpayment directly from your employers. Instead, you report the overpayment on your tax return using Form 8959. The IRS will refund the excess amount when you file, or credit it toward taxes you owe.
To avoid overpaying, you can ask one employer to withhold extra federal income tax instead, which gives you more flexibility. Discuss this with your payroll department or tax professional if you have multiple high-income jobs.
Medicare tax rates and income thresholds for 2024
| Tax Type | Rate | Who Pays | Income Threshold (Additional Tax) |
|---|---|---|---|
| Regular Medicare Tax | 1.45% | Employee and employer each | None — applies to all wages |
| Self-Employment Medicare Tax | 2.9% | Self-employed individual | None — applies to all net self-employment income |
| Additional Medicare Tax | 0.9% | Employee only | $200,000 (single); $250,000 (married filing jointly); $125,000 (married filing separately) |
Questions to ask your employer or tax professional
If you are unsure whether your Medicare tax is being withheld correctly, ask your payroll department these questions: "Is Medicare tax being withheld at 1.45% on all my wages?" and "If my income is over $200,000, is the additional 0.9% Medicare tax being withheld?" You can also request a pay stub review to verify the amounts.
If you are self-employed or have complex income, a tax professional can review your situation and make sure you are paying the correct amount. They can also help you plan ahead if you expect to cross the high-income threshold in the coming year.
Frequently Asked Questions
Does Medicare tax stop when I turn 65?
No. Medicare tax continues to be withheld from your paycheck as long as you work and earn wages, regardless of your age. Enrolling in Medicare does not stop the withholding. The tax funds current Medicare beneficiaries' care and does not create a personal account for you.
Can I opt out of paying Medicare tax?
No. Medicare tax is mandatory for all workers and self-employed individuals. There are no exemptions based on age, income, or religious beliefs. The withholding is required by federal law.
What if I worked in another country — does that count toward Medicare?
Work in other countries generally does not count toward Medicare coverage in the United States. However, some countries have agreements with the U.S. Social Security Administration that allow certain work to be credited. Speak with Social Security if you have worked abroad and want to know whether it counts.
Why do I owe additional Medicare tax if I have two jobs?
Each employer withholds the additional 0.9% Medicare tax independently based on the wages they pay you. They do not know about your other job. When you file your tax return, you can claim a credit for the overpayment, and the IRS will refund it or explore it to other taxes you owe.
Is Medicare tax the same as Medicare premiums?
No. Medicare tax is what you pay during your working years through payroll withholding. Medicare premiums are what you pay after you enroll in Medicare at age 65. Premiums vary by the type of coverage you choose and your income level.