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Medicare Tax
Medicare Tax paystub meaning: 1.45% of every dollar you earn, with no wage cap, plus a 0.9% surtax once your wages pass $200,000 in a calendar year. Codes...
1.45% of every dollar you earn, with no wage cap, plus a 0.9% surtax once your wages pass $200,000 in a calendar year.
Medicare tax is the hospital insurance half of FICA — the reason some stubs label it FICA-HI or simply HI. Employees pay 1.45% and employers pay a matching 1.45%, for 2.9% in total. The defining feature is the absence of a cap. There is no wage base limit for Medicare tax; all covered wages are subject to it, in the first pay period of January and the last of December alike. That is the single biggest difference from the Social Security line sitting next to it. Above a point, the employee rate rises. The Additional Medicare Tax adds 0.9% and your employer must begin withholding it in the pay period your wages for the year pass $200,000, regardless of your filing status. There is no employer match on that 0.9% — it is entirely yours — so the top employee rate becomes 2.35%. The $200,000 withholding trigger is not the same as the threshold where the tax is actually owed. Liability starts at $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for everyone else. Those two rules can disagree in ordinary situations. A married couple each earning $150,000 will have nothing withheld yet owe the surtax on their joint income; a single filer with two $150,000 jobs is in the same position. The gap is settled on Form 8959 with your return, which is where a shortfall or an over-withholding shows up rather than on the stub.
Tax entries on a pay statement depend on taxable wages, current employee elections, filing status, pay frequency, jurisdiction, and current agency instructions. Compare the current-period amount with year-to-date totals and the employer-issued record before treating it as final.
When this term appears on a statement, read its label, current amount, year-to-date amount, pay-period context, and any adjacent rate or hours together. Resolve a mismatch with the original issuer or the cited authority rather than changing a record to force a preferred result.
Example
An employee whose year-to-date Medicare wages are $196,000 receives a $10,000 bonus. The first $4,000 of it is still below the $200,000 trigger: $4,000 × 1.45% = $58.00. The remaining $6,000 is above it, so it carries the extra 0.9%: $6,000 × 2.35% = $141.00. Medicare withheld on that one payment is $199.00. The same result the other way round: $10,000 × 1.45% = $145.00, plus $6,000 × 0.9% = $54.00, which is $199.00. Every later check that year also carries 2.35%.
Source: IRS Topic No. 560 — Additional Medicare Tax
Related terms
- FICA — The law behind two payroll taxes on your stub: 6.2% Social Security and 1.45% Medicare, deducted as you are paid and matched by your employer.
- Social Security Tax — 6.2% of your wages, charged only up to an annual wage base — $184,500 in 2026 — which is why the line stops for high earners late in the year.
- Additional Medicare Tax — A 0.9% extra Medicare tax, with no employer match, that payroll must start withholding once your wages pass $200,000 in a calendar year.