Medicare Tax
What Is Med EE on Your Paycheck?
Med EE stands for Medicare Employee, the employee's share of the federal Medicare tax. You may also see it labeled as Fed MED/EE, FICA-Med, or Medicare Tax on your pay stub. The tax funds the federal Medicare health insurance program, which provides hospital coverage (Part A), outpatient coverage (Part B), and prescription drug coverage (Part D) primarily for Americans aged 65 and older, along with certain younger individuals with disabilities.
Every pay period, your employer withholds 1.45% of your gross wages for Medicare. Your employer contributes a matching 1.45% from its own funds, bringing the combined rate to 2.9%. Unlike Social Security tax, Medicare tax has no wage base limit. The 1.45% rate applies to every dollar you earn throughout the year, no matter how high your income goes.
Medicare is the second component of FICA (Federal Insurance Contributions Act). The first component is the 6.2% Social Security (OASDI) tax, which is capped at $184,500 for 2026. Together, the employee shares of both taxes total 7.65% of wages, the standard FICA withholding you see on most pay stubs.
Paycheck Math
How Is Medicare Tax Calculated on Your Paycheck?
Multiply your gross wages for the pay period by 0.0145. On a $65,000 annual salary paid biweekly across 26 pay periods, each paycheck shows gross wages of $2,500 and a Medicare withholding of $36.25 ($2,500 x 0.0145). Because there is no wage ceiling, this deduction appears on every paycheck throughout the year at the same rate. It never stops or decreases the way Social Security withholding can for high earners who exceed the wage base.
For workers earning above $200,000, the math changes once year-to-date wages pass that threshold. From that point forward, each paycheck is subject to 2.35% (the regular 1.45% plus the 0.9% Additional Medicare Tax). On a biweekly paycheck of $10,000 gross after crossing the threshold, Medicare withholding rises from $145.00 to $235.00.
Some pre-tax deductions affect the base. Section 125 cafeteria plan deductions for health, dental, and vision premiums reduce your Medicare-taxable wages before the percentage is applied. Traditional 401(k) contributions, however, do not reduce Medicare wages. If the Med EE line on your pay stub does not equal 1.45% of your stated gross pay, cafeteria plan deductions are the most likely explanation.
No Cap
Is There a Wage Cap for Medicare Tax?
No. Unlike Social Security tax, which stops at $184,500 for 2026, Medicare tax applies to all covered wages with no upper limit. Whether you earn $30,000 or $500,000, the 1.45% rate is deducted from every dollar. The IRS confirms in Publication 15 that there is no wage base limit for Medicare tax and all covered wages are subject to it.
This distinction matters on your pay stub in two ways. First, your Medicare withholding is predictable: it is always 1.45% of your gross pay (before any Section 125 reductions) on every single paycheck. Second, if your salary exceeds the Social Security wage base, you will see your OASDI withholding drop to zero later in the year while your Medicare withholding continues unchanged. The result is a noticeable increase in take-home pay for those later paychecks, but the Med EE line stays the same.
High Earner Surtax
What Is the Additional Medicare Tax?
Workers earning above certain thresholds owe an extra 0.9% Medicare tax on wages that exceed the limit. The IRS calls this the Additional Medicare Tax, enacted as part of the Affordable Care Act. Your employer begins withholding the additional 0.9% once your wages for the calendar year surpass $200,000, regardless of your filing status.
The actual liability depends on your tax return filing status:
| Filing Status | Threshold |
|---|---|
| Single | $200,000 |
| Married Filing Jointly | $250,000 |
| Married Filing Separately | $125,000 |
| Head of Household | $200,000 |
| Qualifying Surviving Spouse | $200,000 |
Your employer does not match the Additional Medicare Tax. The 0.9% is entirely the employee's responsibility. If your employer withholds based on the $200,000 payroll threshold but your actual filing-status threshold differs (for example, $250,000 if married filing jointly), you reconcile the difference on Form 8959 when you file your federal return.
Employer Share
Does Your Employer Also Pay Medicare Tax?
Yes, for the standard rate. Your employer pays 1.45% on the same wages you earn, matching your contribution dollar for dollar. If your biweekly Medicare deduction is $36.25, your employer sends an additional $36.25 to the IRS from its own funds. The employer share does not appear as a deduction on your pay stub because it comes from the employer's budget, not your wages.
The employer match does not apply to the Additional Medicare Tax. Once your wages exceed $200,000, the extra 0.9% comes entirely from you. The IRS states that there is no employer match for the Additional Medicare Tax. Self-employed individuals pay both the employee and employer shares, a combined 2.9%, through self-employment tax. They may also owe the 0.9% Additional Medicare Tax if net self-employment income exceeds the filing-status threshold.
Medicare Withholding on a $65,000 Salary (2026)
| Line item | Amount |
|---|---|
| Gross annual salary | $65,000.00 |
| Medicare rate (2026) | 1.45% |
| Annual Medicare ($65,000 x 0.0145) | $942.50 |
| Per biweekly paycheck ($942.50 / 26) | $36.25 |
| Employer match (same rate) | $942.50 |
| Additional Medicare Tax (below $200,000) | $0.00 |
How much Medicare tax (Med EE) is withheld from a $65,000 annual salary at the 2026 rate of 1.45%, assuming biweekly pay with 26 pay periods.
Pay Stub Labels
How Does Med EE Appear on Your Pay Stub and W-2?
Payroll systems use several names for the same deduction. Common labels include:
- Fed MED/EE: the most common label, where /EE indicates the employee share
- FICA-Med or FICA Medicare
- Medicare Tax
- Medicare 1.45%
You may also see Fed MED/ER on an employer cost summary. That is the employer's matching 1.45%, not a deduction from your pay.
On your Form W-2, Medicare data appears in two boxes. Box 5 shows your Medicare wages and tips, with no cap applied, so this figure may be higher than the Social Security wages shown in Box 3. Box 6 shows the Medicare tax withheld, which includes the standard 1.45% on all wages plus any Additional Medicare Tax your employer withheld after your wages passed $200,000.
Troubleshooting
What Should You Do If Your Med EE Looks Wrong?
Check the math: multiply your gross wages for the pay period by 0.0145. If the result does not match the Med EE line on your pay stub, consider these explanations:
- Section 125 deductions: Health and dental premiums paid through a cafeteria plan lower your Medicare-taxable wages, so the withholding is 1.45% of gross minus those premiums.
- Additional Medicare Tax: If you earn over $200,000, your withholding rate increases to 2.35% (1.45% plus 0.9%) on wages above that threshold. This can make the Med EE amount appear higher than expected on late-year paychecks.
- Imputed income: Certain fringe benefits, such as group-term life insurance coverage above $50,000, add to your Medicare-taxable wages without increasing your cash gross pay, which can make the withholding seem too high relative to your stated wages.
If none of these applies, contact your payroll department. Employers can file corrected returns with the IRS to fix withholding errors. Keep copies of any pay stubs that show the discrepancy.
Tax Forms
What Forms Report Your Medicare Tax?
Your employer reports Medicare wages and tax on Form W-2 each January:
- Box 5: Medicare wages and tips (no cap, so this figure may exceed the Social Security wage amount in Box 3)
- Box 6: Medicare tax withheld (the standard 1.45% on all wages plus any Additional Medicare Tax withheld)
If you owe Additional Medicare Tax, file Form 8959 with your federal return. Form 8959 calculates the extra 0.9% on wages above your filing-status threshold and reconciles what your employer already withheld against what you actually owe. You may receive a credit if your employer withheld too much, or you may owe more if your combined household income exceeds a higher threshold than the $200,000 payroll cutoff.
Self-employed individuals report Medicare tax through self-employment tax on their federal return. The self-employment tax covers both the 12.4% OASDI and 2.9% Medicare portions. This is general information, not tax advice.
Questions
What Is Med EE on Your Paycheck? FAQ
Is Med EE the same as Medicare tax?
Yes. Med EE, Fed MED/EE, and Medicare Tax all refer to the same deduction: the 1.45% employee share of federal Medicare tax under FICA. Different payroll systems use different labels, but the amount is the same. The /EE suffix means it is the employee portion, distinguishing it from the employer's matching 1.45%.
Does everyone pay Medicare tax on all their income?
Nearly all W-2 employees pay the 1.45% Medicare tax on every dollar of wages with no annual cap. A small number of workers are exempt, including certain nonresident aliens, students employed by their school, and members of qualifying religious groups with IRS-approved exemptions. Self-employed individuals pay both halves, a combined 2.9%, through self-employment tax.
When does the Additional Medicare Tax start?
Your employer begins withholding the extra 0.9% once your wages exceed $200,000 during the calendar year. This $200,000 payroll threshold applies regardless of your filing status. If you file jointly with a spouse, your actual liability threshold is $250,000 of combined income. You reconcile any difference on Form 8959 with your tax return.
Does my employer pay the Additional Medicare Tax too?
No. The 0.9% Additional Medicare Tax is entirely the employee's responsibility. Your employer matches only the standard 1.45% rate. The IRS states that there is no employer match for the Additional Medicare Tax. Employers are required to withhold it once wages exceed $200,000, but the cost falls solely on you.
Do 401(k) contributions reduce my Medicare tax?
No. Traditional 401(k) deferrals reduce your federal income tax but not your Medicare wages. Your full gross pay before the 401(k) deduction is subject to the 1.45% Medicare withholding. Section 125 cafeteria plan deductions for health and dental premiums, however, do reduce your Medicare-taxable wages.
How is Med EE different from the OASDI line on my paycheck?
Both are parts of FICA, but they fund different programs. OASDI (6.2%) funds Social Security retirement, survivor, and disability benefits and is capped at $184,500 for 2026. Med EE (1.45%) funds Medicare health insurance and has no wage cap. Together, the two employee shares total 7.65% of wages.
What does Box 6 on my W-2 include?
Box 6 shows all Medicare tax your employer withheld during the year: the standard 1.45% on all wages plus any Additional Medicare Tax (0.9%) withheld after your wages passed $200,000. If you owe more or less Additional Medicare Tax based on your filing status, you reconcile the difference on Form 8959 when filing your return.
- Sources: IRS: Publication 15 (Circular E), Employer's Tax Guide (2026) · IRS: Topic No. 751, Social Security and Medicare Withholding Rates · IRS: Instructions for Form 8959, Additional Medicare Tax · IRS: Questions and Answers for the Additional Medicare Tax · IRS: General Instructions for Forms W-2 and W-3 (2026)
- Last updated September 22, 2026
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