Medicare Tax
taxDefinition
The Medicare tax is a payroll tax that funds the Medicare health insurance program. Employees and employers each pay 1.45% of all wages, with no income cap. High earners pay an additional 0.9% Medicare surtax on wages above $200,000 for single filers or $250,000 for married couples filing jointly. Unlike Social Security tax, which has an annual wage cap, Medicare tax applies to all earned income.