What is Medicare Tax?
The Medicare tax is a payroll tax in the United States that helps fund the Medicare program, which provides health insurance coverage primarily to individuals aged 65 and older, as well as to some younger people with disabilities. The Medicare tax is collected from both employees and employers.
Here are some key details about the Medicare tax:
Tax Rate: The Medicare tax rate is a flat percentage of an individual's income with no income cap. As of 2022, the Medicare tax rate is 1.45% for both employees and employers. Self-employed individuals are responsible for paying both the employee and employer portions, resulting in a total Medicare tax rate of 2.9%.
Additional Medicare Tax: In addition to the standard Medicare tax rate, higher-income individuals may be subject to an Additional Medicare Tax. This tax applies to earned income above certain thresholds. As of 2022, the Additional Medicare Tax rate is 0.9% for individuals with earned income above $200,000 ($250,000 for married couples filing jointly).
How to Calculate Medicare Tax?
Medicare Tax calculator uses Medicare Tax = Earnings in a Year*(Medicare Tax Rate*0.01) to calculate the Medicare Tax, The Medicare Tax formula is defined as a payroll tax imposed by the United States federal government to fund the Medicare program. Medicare Tax is denoted by MT symbol.
How to calculate Medicare Tax using this online calculator? To use this online calculator for Medicare Tax, enter Earnings in a Year (Epy) & Medicare Tax Rate (IMT) and hit the calculate button. Here is how the Medicare Tax calculation can be explained with given input values -> 4791.96 = 165240*(2.9*0.01).