1. What is Medicare Tax?

Medicare tax is a payroll tax that funds the Medicare health insurance program. It's part of the Federal Insurance Contributions Act (FICA) tax and is automatically deducted from wages.

2. How Medicare Tax is Calculated

The standard Medicare tax calculation:

Where:

• Income — Gross wages or self-employment income
• 0.0145 — 1.45% Medicare tax rate

Note: For employees, this is split between employer and employee (each pays 1.45%). Self-employed individuals pay the full 2.9%.

3. Additional Medicare Tax

Details: High earners (over $200,000 single/$250,000 married) pay an additional 0.9% on income above these thresholds.

4. Using the Calculator

Tips: Enter your gross income in dollars. The calculator will compute the standard 1.45% Medicare tax amount.

5. Frequently Asked Questions (FAQ)

Q1: Is there an income limit for Medicare tax?
A: No, unlike Social Security tax, Medicare tax applies to all wages with no upper limit.

Q2: How is Medicare tax different for self-employed?
A: Self-employed individuals pay both employer and employee portions (2.9% total) through SECA tax.

Q3: What's the Additional Medicare Tax rate?
A: 0.9% on income over $200,000 (single) or $250,000 (married filing jointly).

Q4: Are investment incomes subject to Medicare tax?
A: Generally no, unless you're a high earner subject to the Net Investment Income Tax (NIIT).

Q5: Can I get a refund of Medicare taxes?
A: Only in very limited circumstances like overpayment or if you're a nonresident alien exempt from U.S. taxes.