The FICA-MED line on your paycheck is the Medicare tax your employer withholds from your wages. The rate is a flat 1.45% of your gross pay, with no cap on how much of your income is taxed. Your employer pays a matching 1.45% out of its own funds, and higher earners owe an additional 0.9% on wages above certain thresholds.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
What the FICA-MED Label Actually Means
Payroll software labels this deduction inconsistently. You might see “FICA-MED,” “MED,” “Medicare,” or “Fed Med/EE” on your stub. They all refer to the same 1.45% Medicare hospital insurance tax required under federal law.
FICA stands for the Federal Insurance Contributions Act, which funds two separate programs. One is Social Security retirement and disability, usually labeled “FICA-SS,” “SS,” or “OASDI.” The other is Medicare Part A, which pays for hospital stays, skilled nursing care, and hospice for people 65 and older and for certain people with disabilities. Your FICA-MED withholding goes entirely to that second program.
How Much Comes Out of Each Paycheck
The Medicare tax is 1.45% of your entire gross pay for each pay period.2Office of the Law Revision Counsel. 26 U.S.C. 3101 – Rate of Tax Unlike Social Security tax, which stops once your earnings reach $184,500 in 2026, Medicare tax has no wage base limit.3Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security Whether you earn $40,000 or $4 million, every dollar is subject to the 1.45%.
The math is direct. On a biweekly paycheck of $2,000, the FICA-MED deduction is $29.00. A $10,000 year-end bonus adds another $145.00 in Medicare tax. Your employer runs the calculation and sends the money to the IRS through payroll withholding, so nothing about this appears on your income tax return unless you cross the high-earner threshold below.
Your Employer Pays a Matching 1.45%
For every dollar withheld from your paycheck, your employer contributes an identical 1.45% from its own funds.4Office of the Law Revision Counsel. 26 U.S.C. 3111 – Rate of Tax That brings the total Medicare contribution reaching the federal government to 2.9% of your gross wages. The employer share does not appear on your pay stub because it never comes out of your earnings.
The Extra 0.9% for High Earners
On top of the standard 1.45%, an Additional Medicare Tax of 0.9% applies to wages above a threshold set by your tax filing status:2Office of the Law Revision Counsel. 26 U.S.C. 3101 – Rate of Tax
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
These thresholds are not indexed for inflation, so they stay the same year after year. Once your wages cross your threshold, every additional dollar is taxed at 2.35% (the standard 1.45% plus the 0.9%). Your employer does not match the extra 0.9%, so this piece is entirely on you.
Why Your Withholding May Not Match What You Owe
Your employer starts withholding the extra 0.9% once your wages with that employer pass $200,000 in a calendar year, regardless of your filing status.5eCFR. 26 CFR Part 31 – Employment Taxes and Collection of Income Tax at Source That $200,000 figure is a payroll trigger, not your actual tax threshold. The two often don’t line up:
- A married couple filing jointly with combined wages of $220,000 may have had the extra 0.9% withheld on wages above $200,000, even though their actual threshold is $250,000. They overpaid and can claim a credit.
- Someone married filing separately who earns $180,000 had nothing extra withheld because they stayed under $200,000, but their threshold is $125,000. They owe the extra tax on $55,000.
- Two jobs paying $150,000 each triggers no extra withholding at either employer, yet the combined $300,000 exceeds the single-filer threshold by $100,000.
You reconcile the difference on Form 8959, filed with your tax return whenever any single W-2 shows Medicare wages above $200,000 or your total wages and self-employment income exceed the threshold for your filing status.6Internal Revenue Service. 2025 Instructions for Form 8959 – Additional Medicare Tax Any overpayment becomes a credit; any shortfall is added to what you owe, and you may need to make estimated tax payments during the year to avoid an underpayment penalty.
What Income Is Subject to Medicare Tax
Medicare tax applies to almost all compensation you receive for work. Federal law defines taxable wages broadly as “all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash.”7Office of the Law Revision Counsel. 26 U.S.C. 3121 – Definitions That covers:
- Hourly wages, salaries, and commissions
- Bonuses, vacation payouts, and sick pay
- Cash tips of $20 or more in a calendar month, once reported to your employer8Internal Revenue Service. Topic No. 761, Tips – Withholding and Reporting
- The taxable value of certain non-cash fringe benefits
One fringe benefit catches people off guard on their pay stubs. Employer-provided group term life insurance is tax-free up to $50,000 of coverage, but the imputed cost of coverage above that amount is subject to Medicare tax.9Internal Revenue Service. Group-Term Life Insurance If your employer provides $150,000 in life insurance, you’re paying Medicare tax on the imputed cost of $100,000 of coverage, calculated using IRS premium tables. The amount is usually small, but it explains a line item that otherwise looks mysterious.
Who Doesn’t Pay Medicare Tax
Most workers cannot opt out, but a few narrow exemptions exist.
Students enrolled at least half-time who work for their own college or university may be exempt from FICA entirely, provided the work is related to their studies and they aren’t classified as professional employees with access to benefits like retirement plans or paid vacation.10Internal Revenue Service. Student FICA Exception An off-campus job doesn’t qualify.
Nonresident aliens on F-1, J-1, or M-1 visas are generally exempt from Medicare tax during their first five calendar years in the United States, on wages from authorized employment such as on-campus work or practical training.11Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes The exemption ends when the person becomes a resident alien or changes to a non-exempt status.
Members of recognized religious groups that have existed continuously since December 31, 1950, and that are conscientiously opposed to insurance benefits, can apply for a permanent exemption using IRS Form 4029.12Internal Revenue Service. Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits Approval means giving up all future Social Security and Medicare benefits.
If You’re Self-Employed You Pay Both Shares
Self-employment income has no FICA-MED line because there is no paycheck. Instead, freelancers, independent contractors, and business owners pay both the employee and employer portions themselves under the Self-Employment Contributions Act, for a combined Medicare rate of 2.9% on net earnings.13Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The 0.9% Additional Medicare Tax also applies once self-employment income crosses the same filing-status thresholds.
Self-employment tax is owed when your net earnings reach $400 or more for the year.14Internal Revenue Service. Topic No. 554, Self-Employment Tax You can deduct the employer-equivalent half when calculating adjusted gross income, which lowers your income tax but does not reduce the self-employment tax itself.
How to Verify the Number on Your W-2
Your pay stub shows the Medicare tax deducted each pay period, but the definitive record is your Form W-2 at year’s end. Two boxes matter:
- Box 5 shows Medicare wages and tips: your total compensation subject to Medicare tax. Because there’s no wage cap, this number is typically equal to or greater than the Social Security wages in Box 3.
- Box 6 shows Medicare tax withheld: the total amount your employer deducted during the year, including any Additional Medicare Tax.15Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
To check the standard withholding, multiply Box 5 by 0.0145. If your wages with that employer went over $200,000, also multiply the amount above $200,000 by 0.009 and add it. The total should match Box 6. Rounding differences of a few cents are normal; anything larger is worth raising with your payroll department. If your actual filing-status threshold differs from the $200,000 withholding trigger, Box 6 feeds directly into Form 8959, where the real number gets settled.