What is medicare tax on my paycheck? What is the medicare tax on my paycheck? If you've ever looked at your pay stub and wondered why money is taken out for "Med" or "Medicare," you're not alone. This guide covers the medicare withholding rate, how to calculate medicare wages, medicare wages and tips on w2, medicare wage limits, how much is medicare tax on paycheck, and how the medicare payroll tax works.
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What is medicare tax on my paycheck? What is the medicare tax on my paycheck? What is medicare tax on paycheck? Medicare tax is a federal payroll tax that funds the Medicare health insurance program. Every W-2 employee in the United States has this medicare payroll tax withheld from every paycheck — there are no exceptions.
Detail
Medicare Tax
Employee rate
1.45% of Medicare wages
Employer rate
1.45% (matching)
Total combined rate
2.9%
Additional Medicare Tax
+0.9% on wages over $200,000 (employee only)
Wage cap
None — all wages are subject to Medicare tax
Pay stub label
Med, MED, Medicare, Med EE, or Medicare Tax
W-2 location
Box 5 (wages) and Box 6 (tax withheld)
Medicare is part of FICA (Federal Insurance Contributions Act) along with Social Security (OASDI). Together they make up the 7.65% FICA tax on your pay stub. For the OASDI portion, see what is OASDI.
Medicare Withholding Rate
The medicare withholding rate and medicare tax withholding rate is a flat 1.45% for employees. The medicare payroll rate is the same regardless of income — unlike income tax, there are no brackets. How much is medicare tax on paycheck? It's always 1.45% of your Medicare wages.
Annual Salary
Biweekly Gross
Medicare Per Check (1.45%)
Annual Medicare Tax
$35,000
$1,346.15
$19.52
$507.50
$55,000
$2,115.38
$30.67
$797.50
$75,000
$2,884.62
$41.83
$1,087.50
$100,000
$3,846.15
$55.77
$1,450.00
$250,000
$9,615.38
$139.42*
$4,075.00*
*At $250,000, the Additional Medicare Tax (0.9%) applies to wages over $200,000, adding $450/year.
How to calculate medicare wages — your medicare wages are different from your gross pay and different from your federal taxable wages. Here's the formula:
Medicare Wages = Gross Pay − Section 125 Deductions Only
Section 125: health insurance premiums, FSA, dependent care FSA
Do NOT subtract: 401(k), 403(b), HSA, traditional IRA
Component
Reduces Fed Taxable (Box 1)?
Reduces Medicare Wages (Box 5)?
Reduces SS Wages (Box 3)?
401(k)
✅ Yes
❌ No
❌ No
Health insurance (Sec 125)
✅ Yes
✅ Yes
✅ Yes
FSA
✅ Yes
✅ Yes
✅ Yes
HSA (employer-sponsored)
✅ Yes
✅ Yes
✅ Yes
Traditional IRA
❌ No (claimed on return)
❌ No
❌ No
This is why your medicare wages on your pay stub are often higher than your federal taxable wages but lower than your gross pay. For the full picture of gross vs net, see gross pay vs net pay.
Medicare Wages and Tips on W-2
Medicare wages and tips on w2 appears in Box 5 of your W-2. W2 medicare wages and tips is the total compensation subject to Medicare tax for the year. Here's how Medicare appears across your W-2:
W-2 Box
Label
What It Shows
Example ($80K salary)
Box 1
Wages, tips, compensation
Federal taxable wages
$70,400
Box 3
Social Security wages
Wages subject to SS tax
$76,400
Box 5
Medicare wages and tips
Wages subject to Medicare tax
$76,400
Box 6
Medicare tax withheld
Total Medicare tax for the year
$1,107.80
Notice Box 5 is higher than Box 1 — the 401(k) reduced federal wages but not Medicare wages. For a complete W-2 box mapping, see create W-2 from pay stub.
Medicare Wage Limits & Withholding Cap
Are there medicare wage limits? Is there a medicare withholding cap? Unlike Social Security, Medicare has no wage cap. Every dollar you earn is subject to Medicare tax.
Tax
Employee Rate
Wage Cap (2025)
Max Annual Employee Tax
Social Security (OASDI)
6.2%
$176,100
$10,918.20
Medicare
1.45%
No cap
No maximum
Additional Medicare
0.9%
Applies above $200K
No maximum
This means someone earning $500,000 pays Medicare tax on every dollar, while their OASDI stops at $176,100. For more on the Social Security wage base, see what is OASDI.
Additional Medicare Tax (0.9%)
The Additional Medicare Tax adds 0.9% to the standard medicare withholding rate for high earners. This extra tax applies only to the employee — employers don't match it.
Filing Status
Threshold
Rate on Excess
Total Medicare Rate Above Threshold
Single / Head of Household
$200,000
0.9%
2.35% (employee)
Married Filing Jointly
$250,000
0.9%
2.35% (employee)
Married Filing Separately
$125,000
0.9%
2.35% (employee)
Employers must begin withholding Additional Medicare Tax once wages exceed $200,000 in a calendar year, regardless of filing status. Reconciliation happens on your tax return. For official IRS guidance, see the IRS Additional Medicare Tax FAQ.
Medicare vs OASDI on Your Pay Stub
Both Medicare and OASDI (Social Security) are part of FICA, but they work differently. Understanding the distinction helps you read your pay stub accurately:
On a typical pay stub, Medicare appears in the tax deductions section. Here's what to look for:
Pay Stub Line
Current
YTD
What It Means
Medicare / Med EE
$41.83
$543.79
Your 1.45% Medicare tax this period / year-to-date
OASDI / SS EE
$178.85
$2,325.05
Your 6.2% Social Security tax
FICA (if combined)
$220.68
$2,868.84
Medicare + OASDI combined (7.65%)
Addtl Medicare
$0.00
$0.00
Only appears if wages exceed $200K
Your YTD Medicare tax on your final pay stub should match W-2 Box 6. For pay stub examples, see pay stub samples.
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What is medicare tax on my paycheck and what is the medicare tax on my paycheck — it's the 1.45% federal tax withheld from every paycheck to fund Medicare (hospital insurance for people 65+, certain disabled individuals, and those with end-stage renal disease). Your employer pays an additional matching 1.45%, making the total Medicare payroll tax 2.9%. This appears on your pay stub as Med, MED, or Medicare.
What is the Medicare withholding rate?
The medicare withholding rate and medicare tax withholding rate is 1.45% for employees. Your employer also pays 1.45% (total 2.9%). The medicare payroll rate is the same across all income levels — there is no cap. High earners pay an Additional Medicare Tax of 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly), bringing their effective rate to 2.35%.
How much is Medicare tax on paycheck?
How much is medicare tax on paycheck depends on your gross wages. Multiply your gross pay by 1.45%. For example: $1,000 gross × 1.45% = $14.50 Medicare tax. On a $50,000 annual salary paid biweekly, that's roughly $27.88 per paycheck ($50,000 ÷ 26 × 0.0145). The medicare payroll tax applies to 100% of your wages — unlike Social Security, there is no earnings cap.
What are Medicare wages and tips on W-2?
Medicare wages and tips on w2 (Box 5) and w2 medicare wages and tips represent your total compensation subject to Medicare tax. This includes regular wages, overtime, bonuses, commissions, and tips. Medicare wages are usually higher than Box 1 (federal taxable wages) because 401(k) contributions reduce Box 1 but not Box 5. Only Section 125 cafeteria plan deductions (health insurance, FSA) reduce Medicare wages.
How to calculate Medicare wages?
How to calculate medicare wages: Start with gross wages. Subtract only Section 125 (cafeteria plan) deductions — health insurance premiums and FSA contributions. Do NOT subtract 401(k), HSA, or other pre-tax retirement contributions. The result is your Medicare wages. Example: $85,000 gross − $3,600 health insurance = $81,400 Medicare wages. The 401(k) contribution does not reduce Medicare wages.
Is there a Medicare wage limit or cap?
There is no medicare wage limits or medicare withholding cap — unlike Social Security (OASDI), which has an annual wage base of $176,100 (2025), Medicare tax applies to ALL earnings with no upper limit. Every dollar you earn is subject to the 1.45% Medicare tax. High earners pay an additional 0.9% on wages above $200,000.
What is Medicare tax on paycheck used for?
What is medicare tax on paycheck — your Medicare payroll tax funds Medicare Part A (hospital insurance), which covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. It does not fund Medicare Part B (doctor visits), Part C (Medicare Advantage), or Part D (prescription drugs) — those are funded by premiums and general tax revenue.
What is the Medicare payroll tax rate for self-employed?
Self-employed individuals pay the full 2.9% Medicare payroll tax (both the employee and employer portions) as part of self-employment tax. This is reported on Schedule SE. The Additional Medicare Tax of 0.9% also applies to self-employment income above $200,000. The total medicare payroll rate for high-earning self-employed individuals is 3.8%.