What It Is, Who Has to Pay It, Current Rates, Limits, Calculator & How to Pay ?

United States
"Medicare Tax"

What is Medicare Tax ?

Medicare tax is a type of payroll tax that is collected to help fund Medicare program, which provides health insurance coverage to individuals who are 65 years or older & who have certain disabilities.

How Medicare Tax Works ?

Medicare tax is part of FICA taxes. Employers are required to withhold a portion of their employees' wages to pay for Medicare taxes & self-employed individuals are required to pay tax themselves. 


Medicare Tax Rate

Medicare tax rate for employees is 1.45% of their wages & employers also contribute 1.45% on behalf of employees. If you are self-employed, you are responsible for paying 2.9% of your net income. 

Who has to Pay Medicare Tax ?

In the United States, anyone who earns wages or self-employment income is subject to paying Medicare tax, regardless of their age or whether they are enrolled in the Medicare program.

Additional Medicare Tax

The Additional Medicare Tax rate is 0.9% and applies to individuals with wages, self-employment income, or other compensation that exceeds certain income thresholds. 

Who is Exempt from Paying Medicare Tax ?

In the United States, certain individuals, such as nonresident aliens, certain religious group members, and some government employees, may be exempt from paying Medicare tax.

How to Pay Medicare Tax ?

You will need to include the Medicare tax as part of your estimated tax payments throughout the year, and report and pay the tax as part of your annual income tax return.