Additional Medicare Withholding Rate

Medicare tax withholding is mandatory for all employers so that Medicare services are funded, just like the Social Security tax. Both are similar but the tax rates are different. Outside of that, Medicare taxes are also subject to additional withholding with a rate of 0.9 percent added on top of the 1.45 percent Medicare tax. This additional Medicare withholding applies to only individuals that earn up to a certain amount from their jobs. For the 2024 tax year, the additional Medicare withholding applies to individuals that earn:

• $200,000 as a single filer
• $250,000 as a joint filer
• $125,000 as married filing separately
• $200,000 as a head of household
• $200,000 as a qualifying widow(er) with dependent child

All individuals that make above the income thresholds are subject to the additional Medicare withholding. Whether you’re working for an employee or self-employed, the additional Medicare withholding rate is 0.9 percent. So those who earn their income by working for an employer will pay 2.35 percent in total. Those who are self-employed will pay 3.8 percent. 

However, not all of your wages are subject to additional Medicare withholding. Only wages or earned income that exceed the income thresholds are subject to the additional withholding rate.  

How to pay additional Medicare withholding?

There isn’t anything you need to do to pay additional Medicare withholding the same as you don’t do anything to pay Medicare taxes. The payroll department of the company you’re working at or your employer will handle these. This of course goes for those who are working for an employer. 

Self-employed individuals need to report the additional Medicare withholding amount and pay. So you will uphold the job of an accountant when you’re figuring out additional Medicare taxes as someone who’s self-employed. This is one of the few things that will add up as extra work but a tax preparer can help you not think about these.

All and all, the total additional Medicare tax withholding is 2.35 percent for employees and 3.8 percent for self-employed people.