Two layers
Everyone pays 1.45% of wages for Medicare, with no cap. Above 200,000 (single) or 250,000 (married filing jointly), an additional 0.9% applies to the excess — bringing the marginal Medicare rate to 2.35% on high income.
The threshold is not indexed
Unlike brackets, the additional Medicare threshold has never been indexed to inflation. More people cross it every year purely because wages rise, which is a quiet tax increase built into the statute.
Employer withholding quirk
- Employers must withhold the extra 0.9% once wages exceed 200,000 regardless of marital status
- Married couples with two incomes can under-withhold and owe at filing
- Self-employed pay 2.9% base plus 0.9% above the threshold
- Medicare has no wage cap, unlike Social Security
Why it matters for high earners
Combined with Social Security, FICA is 7.65% up to the wage base, then 1.45% (plus 0.9% if applicable). For compensation planning above 200,000, the marginal payroll tax is 2.35% — small, but it appears in every incremental-dollar calculation.
Frequently Asked Questions
Is there a Medicare wage cap?
No — unlike Social Security, Medicare tax applies to all wages.
What is the additional Medicare tax?
0.9% on wages above 200,000 single / 250,000 married filing jointly.
Do employers pay the additional tax?
No — the 0.9% is employee-only; employers just withhold it.
Assumptions & disclaimer
Results are estimates for planning. Fee schedules, tax brackets and deduction limits change; confirm current figures with the marketplace, the IRS or a qualified accountant before making decisions. Nothing here is financial, tax or legal advice.
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