How to Find Medicare Tax on Your Pay Stub and W-2

Medicare tax is a federal payroll tax that funds the Medicare program, a national health insurance initiative. This tax helps provide healthcare coverage for individuals aged 65 and over, as well as certain younger individuals with disabilities. It supports the Medicare Trust Funds which finance hospital insurance and medical services.

Locating Medicare Tax on Your Pay Stub

To track your Medicare tax contributions, understand your pay stub. Employers withhold Medicare tax from employee wages as a payroll deduction. This amount is typically found within the “deductions” or “taxes withheld” section of your pay stub.

You might see Medicare tax identified by various labels or abbreviations, such as “Medicare Tax,” “Med,” “Mcare,” “HI” (Hospital Insurance), or as part of “FICA” (Federal Insurance Contributions Act), which combines Social Security and Medicare taxes. Your pay stub generally displays both the amount withheld for the current pay period and a year-to-date total, allowing you to monitor your contributions throughout the year.

Locating Medicare Tax on Your Tax Forms

The Form W-2, Wage and Tax Statement, is the primary source for finding your Medicare tax information. Your employer provides this form at the end of each calendar year. Box 5 of the W-2 reports your “Medicare wages and tips,” which includes all earnings subject to Medicare tax, such as salaries, bonuses, and tips.

Box 6 on your W-2 shows the “Medicare tax withheld,” indicating the total amount deducted from your pay during the year. For self-employed individuals, Medicare tax liability is calculated and reported on Schedule SE (Form 1040), “Self-Employment Tax.” This form computes both Social Security and Medicare taxes based on net earnings from self-employment. The final Medicare tax amount flows from Schedule SE to your Form 1040, U.S. Individual Income Tax Return.

Understanding Your Medicare Tax Contributions

The standard Medicare tax rate is 2.9% of earned income, generally split between the employee and employer for W-2 wages. Employees typically pay 1.45% of their gross wages, and employers contribute a matching 1.45%. For self-employed individuals, the entire 2.9% rate applies to their net earnings from self-employment, encompassing both portions.

Medicare tax has no wage base limit, meaning all covered wages and net earnings from self-employment are subject to it, unlike Social Security tax, which has an annual income cap. High-income earners may also be subject to an Additional Medicare Tax. This 0.9% surtax applies to earned income exceeding certain thresholds: $200,000 for single filers, $250,000 for married couples filing jointly, and $125,000 for married individuals filing separately. Employers withhold this additional tax from employee wages once the threshold is met, but they do not contribute a matching amount.

Addressing Common Scenarios

Individuals with multiple employers will find each employer withholds Medicare tax separately based on wages paid. If an individual’s combined income from multiple jobs exceeds the Additional Medicare Tax threshold, they might not have had the additional tax withheld from each paycheck. The total Medicare tax liability, including any Additional Medicare Tax, is reconciled when filing the annual federal income tax return, Form 1040. If insufficient tax was withheld, the individual may owe additional tax or need to make estimated payments.

Self-employed individuals pay their Medicare tax, along with Social Security tax, through estimated tax payments throughout the year, typically quarterly. The IRS provides Form 1040-ES, Estimated Tax for Individuals, with worksheets to help self-employed individuals calculate their quarterly tax obligations, covering both income tax and self-employment taxes. This helps ensure compliance and avoids potential underpayment penalties.