Medicare Tax Calculator 2025: Know Your Payroll Obligation
The Medicare tax is 1.45% on all earned income — no wage cap. High earners pay an Additional Medicare Tax of 0.9% above thresholds. Our calculator handles both employees and self-employed.
2025 Medicare Tax Rates
| Type | Rate | Applies To |
|---|---|---|
| Regular Medicare | 1.45% | All wages |
| Additional Medicare | 0.9% | Income over threshold |
| Self-Employed Total | 2.9% | 92.35% of net profit |
Additional Medicare Tax Thresholds (2025)
| Filing Status | Threshold |
|---|---|
| Single / HoH / MFS | $200,000 |
| Married Joint | $250,000 |
Applies to: Wages, self-employment income, RRTA compensation. Not investment income.
Employee vs Self-Employed
- W-2 Employee: You pay 1.45%. Employer pays 1.45%. Additional 0.9% withheld if over threshold.
- Self-Employed: You pay full 2.9% (1.45% x 2). Deduct half on Schedule 1.
Self-Employment Medicare Rule
Tax on 92.35% of net profit:
- 100% net profit × 0.9235 = Medicare base
- Base × 2.9% = Total Medicare tax
- Deduct 50% on Form 1040, Line 15
Example: Single, $180,000 W-2
Wages: $180,000 Regular: $180,000 × 1.45% = $2,610 Additional: $0 (under $200K) Total Medicare: $2,610
Example: Married Joint, $300,000 W-2
Wages: $300,000 Regular: $300,000 × 1.45% = $4,350 Additional: ($300K − $250K) × 0.9% = $450 Total: $4,800
Self-Employed Example
Net Profit: $150,000 Base: $150,000 × 92.35% = $138,525 Tax: $138,525 × 2.9% = $4,017.23 Deduct: $2,008.62 (half)
What’s Included in Medicare Wages?
- Salary, bonuses, commissions
- Tips, overtime
- Deferred compensation
- Most fringe benefits
Common Mistakes
- Forgetting Additional Medicare Tax
- Using gross instead of Medicare wages
- Not applying 92.35% rule for self-employed
- Claiming full deduction (only 50%)
How to Pay
W-2: Withheld from paycheck Self-Employed: Quarterly estimated taxes (Form 1040-ES)
FAQs
Is there a Medicare wage cap? No — unlike Social Security ($168,600 in 2025).
Does investment income count? No — only earned income.
Can I avoid Additional Medicare Tax? No — mandatory if over threshold.
Conclusion
Plan your payroll and estimated taxes with our 2025 Medicare Tax Calculator. Pair with Payroll Tax Calculator for full FICA. Stay compliant!
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