What Is the Additional Medicare Tax?
Quick Answer
The Additional Medicare Tax is an extra 0.9% tax on earned income above $200,000 (single) or $250,000 (married filing jointly). It was introduced by the Affordable Care Act in 2013 and applies on top of the regular 1.45% Medicare tax. Unlike the base Medicare tax, your employer does not match this surcharge — it comes entirely out of your paycheck. Combined with the regular rate, high earners pay 2.35% in Medicare tax on income above the threshold.
Who Pays the Additional Medicare Tax
The thresholds vary by filing status:
| Filing Status | Threshold |
|---|---|
| Single | $200,000 |
| Married Filing Jointly | $250,000 |
| Married Filing Separately | $125,000 |
| Head of Household | $200,000 |
These thresholds have not been adjusted for inflation since they were set in 2013, meaning more workers cross them each year as wages rise.
How It Works in Practice
Your employer begins withholding the Additional Medicare Tax once your wages exceed $200,000 in a calendar year — regardless of your actual filing status. This creates two common scenarios:
Single filer earning $220,000: Employer starts withholding the extra 0.9% after paycheck that crosses $200,000. Withholding matches liability. No surprise at tax time.
Married couple with two incomes: If each spouse earns $150,000, neither employer withholds the additional tax (neither crosses $200,000 individually). But combined income is $300,000, which exceeds the $250,000 married threshold. They owe 0.9% on $50,000 = $450 when they file.
Real Example With Actual Numbers
Daniel is single and earns $240,000 as a software engineer in Texas. Here is his full Medicare tax for the year:
| Income Range | Rate | Tax |
|---|---|---|
| $0 - $200,000 | 1.45% | $2,900.00 |
| $200,001 - $240,000 | 1.45% + 0.9% = 2.35% | $940.00 |
| Total Medicare tax | $3,840.00 |
Without the Additional Medicare Tax, Daniel would pay $3,480.00. The surcharge costs him an extra $360.00 per year.
His employer also pays the regular 1.45% match on all $240,000 ($3,480), but does not match the 0.9% surcharge. Use the SalaryHog calculator to see Medicare tax broken out for your salary.
Additional Medicare Tax on Self-Employment Income
If you are self-employed, the Additional Medicare Tax applies to net self-employment income above the same thresholds. It is calculated on top of the 2.9% base self-employment tax (which covers both the employee and employer portions of regular Medicare).
For someone with both W-2 wages and self-employment income, the wages count first toward the threshold. If your wages are $180,000 and your side hustle nets $50,000, the Additional Medicare Tax applies to $30,000 of that combined income ($230,000 total - $200,000 threshold). Try the freelance calculator to model this.
Strategies for Managing the Additional Medicare Tax
Since the thresholds are not inflation-adjusted, this tax affects more people each year. There is no direct way to avoid it if your income exceeds the thresholds, but consider:
- Filing status: Married filing jointly has a higher threshold ($250,000) than two single filers ($200,000 each), which benefits couples with unequal incomes
- Timing income: If you have control over when bonuses or self-employment income is received, spacing income across years can sometimes help
- Pre-tax retirement contributions: While 401(k) contributions do not reduce Medicare tax, they reduce federal income tax, freeing up cash to cover the surcharge
Check your total tax burden at any income level with the SalaryHog calculator.