Medicare tax.

Medicare tax is a payroll tax that funds Medicare, taken out of nearly every paycheck at 1.45 percent, with employers matching another 1.45 percent.

Reviewed by Joseph Citizen, Founder · Last reviewed July 12, 2026

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Medicare tax

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In plain English

Medicare tax is one half of FICA, the payroll tax that funds federal programs for retirees. It is withheld from essentially all wage income at 1.45 percent, and your employer pays a matching 1.45 percent, for 2.9 percent total. Unlike Social Security tax, it has no wage cap, so it applies to every dollar you earn. High earners pay an extra 0.9 percent Additional Medicare Tax above certain income thresholds. Self-employed workers pay both halves themselves as part of self-employment tax.

Most useful ages

16 to 70

01Why it matters

Medicare tax comes out of every paycheck with no income ceiling, so it quietly applies to all your earnings, and knowing the rate helps you read your pay stub and plan for self-employment.

02The math, step by step

On a 60,000 dollar salary, Medicare tax is 1.45 percent, or about 870 dollars withheld over the year, and your employer pays another 870 dollars you never see on the stub.

03What this is NOT

Do not confuse with Social Security tax

Medicare tax is NOT the same as Social Security tax. Both are FICA, but Social Security tax stops at an annual wage cap, while Medicare tax has no cap and applies to every dollar of wages.