Medicare is the other half of FICA, and unlike Social Security it has no wage cap. Here's how it works in 2026 including the Additional Medicare Tax.
By ExpertPaystubs Editorial Team. Published 2026-02-25
Medicare tax (formally Hospital Insurance or HI) is one of two FICA taxes on your pay stub. Unlike Social Security, Medicare has no wage cap — you pay it on every dollar you earn. And if you're a high earner, there's an additional surcharge.
2026 Medicare Tax Rates
| Component | Rate | Applies To |
|---|---|---|
| Regular Medicare (Employee) | 1.45% | All wages |
| Regular Medicare (Employer) | 1.45% | All wages (matching) |
| Additional Medicare Tax | 0.9% | Wages over $200,000 (single) |
| Self-Employed Medicare | 2.9% | All net self-employment income |
How Medicare Appears on Your Pay Stub
Your stub may label Medicare tax as:
- MED or MED EE (Medicare Employee)
- HI (Hospital Insurance)
- FICA-MED or FICA-HI
Example for someone earning $4,000 bi-weekly:
Medicare (1.45%): -$58.00
Additional Medicare Tax
The Affordable Care Act added a 0.9% surtax on earnings above:
- $200,000 — Single filers
- $250,000 — Married filing jointly
- $125,000 — Married filing separately
Important: Your employer only withholds Additional Medicare Tax based on individual wages exceeding $200,000 — regardless of filing status. Any adjustments happen when you file your tax return.
Example: $300,000 Annual Salary
| Earnings | Rate | Tax |
|---|---|---|
| First $200,000 | 1.45% | $2,900 |
| Next $100,000 | 2.35% (1.45% + 0.9%) | $2,350 |
| Total Medicare Tax | $5,250 |
Medicare vs Social Security: Key Differences
| Feature | Social Security | Medicare |
|---|---|---|
| Tax rate (employee) | 6.2% | 1.45% |
| Wage cap | $184,500 | None |
| Additional tax | None | 0.9% above $200K |
| Self-employed rate | 12.4% | 2.9% |
| What it funds | Retirement, disability | Hospital insurance |
Self-Employment and Medicare
Self-employed workers pay the full 2.9% Medicare tax (both employer and employee portions). The 0.9% Additional Medicare Tax also applies to net self-employment earnings over:
- $200,000 (single)
- $250,000 (married filing jointly)
You can deduct 50% of your total self-employment tax (including Medicare) on Form 1040.