Medicare Tax Rate 2026: 1.45% Base + 0.9% Additional Medicare

The Medicare portion of the federal payroll tax funds Hospital Insurance (Part A). Unlike Social Security tax, Medicare tax has no wage cap — it applies to every dollar of covered earnings — and high earners pay an extra surtax on top. Here is how the Medicare tax works for 2026.

The 1.45% Base Medicare Rate

For employees, the Medicare tax is 1.45% of all wages, matched by another 1.45% from the employer, for a combined 2.9%.

There is no maximum — the rate applies to your first dollar and your millionth dollar of wages alike. This is the key difference from the Social Security tax, which only applies up to an annual wage base.

For self-employed individuals, the full 2.9% Medicare rate applies because you pay both the employee and employer halves yourself (see the self-employment tax guide).

Social Security vs. Medicare: The Wage-Base Difference

The two halves of FICA behave very differently in 2026:

• Social Security tax: 6.2% (employee) on wages up to the 2026 wage base of $184,500 — up from $176,100 in 2025. Earnings above $184,500 are not subject to Social Security tax.
• Medicare tax: 1.45% on all wages, with no cap.

So a worker earning $300,000 stops paying Social Security tax after $184,500 of wages, but keeps paying Medicare tax on the entire $300,000 — and owes the Additional Medicare Tax described below.

The 0.9% Additional Medicare Tax

High earners owe an extra 0.9% Additional Medicare Tax on wages and self-employment income above a threshold. This surtax was introduced by the Affordable Care Act and applies on top of the 1.45% base rate.

The thresholds are set by statute and are not indexed for inflation — they have stayed the same since the tax took effect:

Above the threshold, the employee Medicare rate effectively becomes 2.35% (1.45% + 0.9%). The employer does not match the additional 0.9% — it is entirely the employee’s responsibility.

How Employers Withhold It

Employers must begin withholding the additional 0.9% once an employee’s wages from that employer exceed $200,000 in a calendar year — regardless of the employee’s filing status. This can cause a mismatch:

• If you’re married filing jointly with $250,000 combined wages but neither spouse individually exceeds $200,000 at one employer, too little may be withheld — you reconcile on Form 8959 at filing.
• If you’re single earning $210,000 at one job, the employer over- or under-withholds based only on the $200,000 trigger, again reconciled on Form 8959.

Worked Example (2026)

A single employee earns $260,000 in wages.

• Base Medicare: 1.45% × $260,000 = $3,770
• Additional Medicare: 0.9% × ($260,000 − $200,000) = 0.9% × $60,000 = $540
• Total employee Medicare tax: $4,310

Because Medicare has no wage cap, all $260,000 is subject to the 1.45% base; only the $60,000 above the $200,000 threshold gets the extra 0.9%.

Don’t Confuse It With the 3.8% NIIT

The 0.9% Additional Medicare Tax applies to earned income (wages and self-employment income). A separate 3.8% Net Investment Income Tax (NIIT) applies to investment income (capital gains, dividends, interest) above the same $200,000/$250,000 MAGI thresholds. A high earner with both wages and investment income can owe both — but they apply to different types of income and are never charged on the same dollar.

Key Takeaways

• The 2026 Medicare tax is 1.45% on all wages (2.9% combined with the employer), with no wage cap.
• The 0.9% Additional Medicare Tax applies to earned income over $200,000 (single) / $250,000 (MFJ) / $125,000 (MFS) — thresholds that don’t change with inflation.
• Social Security tax, by contrast, stops at the 2026 wage base of $184,500.
• High earners reconcile additional Medicare withholding on Form 8959 and may also owe the separate 3.8% NIIT on investment income.

Use the FICA calculator to see your combined Social Security and Medicare tax, or the self-employment tax calculator if you work for yourself.