Medicare Tax

Medicare tax is the 1.45% payroll tax withheld from all wages to fund Medicare hospital insurance. There is no wage cap. Employers pay a matching 1.45%, and wages over $200,000 add an employee-only 0.9%.

On a $2,307.69 paycheck it is $33.46. Pay stubs may label it MED or HI. Together with Social Security tax it makes up FICA, as the FAQ on FICA and federal income tax explains.

The extra 0.9% is the Additional Medicare Tax. Pre-tax health premiums and HSA payroll contributions lower Medicare wages, while 401(k) deferrals do not. For the full picture, read the FICA tax guide.