Medicare Tax

Medicare tax is 1.45% on all wages with no cap, plus an Additional Medicare Tax of 0.9% on high earners.

Additional Medicare Tax Thresholds

Unlike Social Security, there is no wage base limit — all earned income is subject to Medicare tax. The additional 0.9% is employee-only (no employer match).

The 0.9% Additional Medicare Tax and the 3.8% NIIT were both introduced by the Affordable Care Act to fund Medicare. They target different types of income: Medicare tax applies to earned income, NIIT applies to investment income.

Sources

• IRS: Questions and Answers for the Additional Medicare Tax
• IRS Form 8959 – Additional Medicare Tax