To calculate the Medicare tax withheld from your wages, multiply your Medicare wages by 1.45%. If your wages from one employer pass $200,000 in a calendar year, add another 0.9% on every dollar above that mark. Those two rates, applied to the right wage base, are the whole calculation.
Start With Your Medicare Wages, Not Your Gross Pay
Medicare wages are not the same as the salary on your offer letter. Some pre-tax deductions come out before the tax is calculated; others don’t. Getting this figure right is the foundation of everything else.
Pre-tax contributions through a Section 125 cafeteria plan reduce your Medicare wages. That covers employer-sponsored health insurance premiums, flexible spending accounts, and dependent care benefits. Employer contributions to a health savings account are also excluded. If you fund an HSA through a regular payroll deduction outside a cafeteria plan, though, that money stays in the wage total.1Internal Revenue Service. Publication 15 Employer’s Tax Guide
Retirement contributions are the common surprise. Money you defer into a 401(k), 403(b), or similar plan lowers your federal income tax but does not lower your Medicare wages.2Internal Revenue Service. Retirement Plan FAQs Regarding Contributions Earn $80,000 and defer $10,000 into a 401(k), and your Medicare wages are still $80,000.
Cash tips count once you receive at least $20 in tips during a calendar month. After that point, the full month’s tips are subject to Medicare tax.3Internal Revenue Service. Employer’s Tax Guide (Circular E)
One thing that does not exist for Medicare: a wage cap. Social Security tax stops applying once your earnings hit the annual limit, but Medicare tax applies to every dollar, no matter how high your income goes.4Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
The clean way to check your wage figure is Box 5 of your W-2, which reports total Medicare wages and tips for the year.
Apply the 1.45% Rate
Once you have your Medicare wages, multiply by 0.0145.5Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax On $60,000 in Medicare wages, that’s $870 withheld across the year. On $45,000, it’s $652.50.
Your employer pays a matching 1.45% from its own funds, so the government collects $1,740 on that $60,000 salary in total.4Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The employer’s share never appears on your paycheck.
Payroll systems don’t wait until year-end. Each pay period, 1.45% comes out of that period’s Medicare wages, so the withholding builds evenly across your checks.
Add 0.9% Once Your Wages Cross $200,000
The Additional Medicare Tax is a 0.9% surcharge on wages above a threshold that depends on your tax filing status:5Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax
- Single, head of household, or qualifying surviving spouse: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
Only the wages above your threshold are hit with the extra 0.9%. A single filer with $230,000 in Medicare wages has $30,000 of excess wages, so the surcharge is $270. Combined with the standard portion ($230,000 × 0.0145 = $3,335), total Medicare tax for the year is $3,605.
Employers do not match this 0.9%. The full surcharge falls on the employee.6Internal Revenue Service. Topic No. 560, Additional Medicare Tax
How Employers Actually Trigger the Withholding
Your employer starts withholding the extra 0.9% once your wages from that job pass $200,000 for the year. That single trigger applies to every employee, regardless of filing status.6Internal Revenue Service. Topic No. 560, Additional Medicare Tax The employer has no visibility into your spouse’s income or your filing plans, so the rule is uniform.
Expect mismatches. A married couple filing jointly doesn’t actually owe the surcharge until their combined wages top $250,000, but a spouse who individually earns over $200,000 will see it withheld anyway. That excess comes back as a credit at tax time. The reverse also happens: two spouses each earning $150,000 will have nothing extra withheld, even though their combined $300,000 crosses the joint threshold. That couple owes the difference when they file.
You cannot ask your employer to stop the extra withholding once it starts, even if you know your final liability will be lower. The employer must continue through year-end, and you reconcile on your return.6Internal Revenue Service. Topic No. 560, Additional Medicare Tax
Multiple Jobs
Each employer tracks only its own wages. If you earn $120,000 from one job and $110,000 from another, neither will withhold the additional 0.9%, but your combined $230,000 puts a single filer $30,000 over the threshold.7Internal Revenue Service. Questions and Answers for the Additional Medicare Tax You’d owe $270 at filing. Estimated tax payments during the year can head off an underpayment penalty.
Verify the Numbers on Your W-2
Two boxes on your W-2 carry the answer:
- Box 5 shows Medicare wages and tips for the year.
- Box 6 shows the total Medicare tax withheld, including both the standard 1.45% and any Additional Medicare Tax.8Internal Revenue Service. Form W-2 Wage and Tax Statement 2026
Quick check: Box 6 should equal at least Box 5 × 0.0145. If your wages exceeded $200,000 from that employer, Box 6 will be higher because of the 0.9% add-on. If the numbers don’t line up, ask payroll before you file.
Reconcile the Surcharge on Form 8959
If your total Medicare wages plus any self-employment income exceed the threshold for your filing status, you file Form 8959 with your return.9Internal Revenue Service. Instructions for Form 8959 The same form handles two situations: owing more than was withheld, and getting back what was over-withheld.
Part V of the form reconciles the withholding. You enter the total Medicare tax withheld from your W-2 Box 6 totals, subtract the standard 1.45% on those wages, and the remainder is the amount specifically withheld for Additional Medicare Tax. Any excess over your actual liability flows to Form 1040 as a credit against your total tax. Any shortfall is added to what you owe.9Internal Revenue Service. Instructions for Form 8959
A Note If You Are Self-Employed
This calculation is for wages reported on a W-2. Self-employment income is taxed for Medicare on a different base (net earnings reduced by 92.35%) and at 2.9% instead of 1.45%, because there is no employer to cover the other half.10Internal Revenue Service. Topic No. 554, Self-Employment Tax If you have both wages and self-employment income, Form 8959 pulls them together for the 0.9% surcharge.