Social Security tax rate and Medicare tax rate

Understanding Medicare and Social Security taxes can help you better estimate payroll withholding and avoid surprises at tax time. While both taxes are collected through payroll, they fund different programs and have different tax rates and wage limits. The Medicare tax rate can also increase for higher-income taxpayers through the Additional Medicare Tax.

What is Social Security?

Social Security is a federal program that provides benefits to eligible retirees, people with disabilities, and certain survivors and dependents. Social Security taxes collected through payroll help fund these benefits.

Employees pay Social Security tax through paycheck withholding and employers contribute an equal amount. Self-employed individuals generally pay both the employee and employer portions through self-employment tax.

What is Medicare tax?

Medicare tax is a federal payroll tax that helps fund Medicare, the federal health insurance program primarily for people age 65 and older and certain individuals with disabilities.

The Medicare tax rate applies to covered wages and self-employment income. Unlike Social Security tax, Medicare tax does not have an annual wage cap.

What is the Social Security tax rate?

For employees, the Social Security tax rate is 6.2%, and employers also pay 6.2%, for a combined rate of 12.4%.

For 2026, Social Security tax applies only to wages up to the annual wage base limit, $184,500. The wage base limit for the Social Security tax is indexed or increased annually for inflation.  Earnings above the wage base are not subject to Social Security tax.

If a taxpayer has more than one employer in a calendar year, the taxpayer may have excess social security tax withheld. Excess withholding can occur when your total wages from all employment is more than the maximum taxable social security earnings base for the year. A taxpayer may claim a credit for the excess amount withheld. If a single employer withheld too much social security tax, the over-withheld amount should either be returned by the employer or if the employer does not refund the excess, the taxpayer can file a claim for refund.

What is the Medicare tax rate?

The Medicare tax rate for employees is 1.45% of covered wages. Employers also pay 1.45%, making the total Medicare tax percentage 2.9%.

Unlike Social Security tax, Medicare tax applies to all covered wages because there is no wage-based limit.

Self-employed taxpayers generally pay the full 2.9% Medicare tax rate because they are responsible for both the employee and employer portions.

What is the Additional Medicare Tax?

The Additional Medicare Tax is an extra 0.9% tax that applies to earned income above certain IRS income thresholds. It was created under the Affordable Care Act and is paid in addition to the regular Medicare tax.

This Additional Medicare Tax can apply to:

• Wages
• Bonuses
• Tips
• Certain taxable fringe benefits
• Self-employment income

As of 2026, employers must begin withholding the Additional Medicare Tax once an employee’s wages exceed $200,000 for single filers during the year. (To see the income thresholds that apply to the other filing statuses, refer to the table below.)

It’s possible to owe the Additional Medicare Tax even if your employer doesn’t withhold it. For example, married couples filing jointly may exceed the income threshold when combining their incomes, even if neither spouse individually earns more than $200,000. In order to avoid possible penalties, the taxpayer, and spouse (if applicable), should monitor their income if they are close to the threshold amount for their filing status to ensure the proper amount is being withheld.

What is the income threshold for the Additional Medicare Tax?

For 2026, the Additional Medicare Tax applies to earned income above the following thresholds:

Only the income above the threshold is subject to the additional 0.9% tax. For example, if you’re married filing jointly and have a combined earned income of $300,000, the first $250,000 is subject to the regular Medicare tax rate. Only the remaining $50,000 is subject to the Additional Medicare Tax of 0.9%.  These income thresholds are not indexed or increased annually for inflation.

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**All tax situations are different. Not everyone gets a refund. See hrblock.com/guarantees for complete details.