All employees pay 1.45% in Medicare taxes. People earning above a certain threshold may also face an additional 0.9% tax on income or a 3.8% tax on investment income.
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What is the Medicare tax?
On July 30, 1965, President Lyndon B. Johnson signed Medicare into law to help cover healthcare costs after age 65, as well as for people with disabilities and certain illnesses. The Medicare tax, which is a type of payroll tax, funds medical, hospital and hospice care for these groups.
What is the Medicare tax rate?
The Medicare tax rate for 2026 is 2.9% and is split between employees and their employer, with each paying 1.45%. It’s a mandatory payroll tax applied to earned income and wages, and comes out of your paycheck just like Social Security tax. Employers who don’t pay face a penalty.If you’re self-employed, you’ll be responsible for paying both the employer and employee contributions, totaling 2.9%. The good news is that you can likely deduct half of your total self-employment tax when you file your return.ADOwe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.Learn more Learn more
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What are the Medicare surtaxes?
A surtax is an additional tax certain people are subject to on top of an existing tax. The Affordable Care Act created two Medicare surtaxes on high earners to fund additional services: the additional Medicare tax and the net investment income tax.
Additional Medicare tax
The additional Medicare tax, also known as the “high earners tax,” is a 0.9% tax on income above $200,000 for individuals or $250,000 for married couples filing jointly.
Net investment income tax
A 3.8% net investment income tax (NIIT) may apply to investment income, which includes capital gains, dividends, annuity distributions, royalties, rent and interest. The income eligibility threshold varies based on your tax filing status, says Colleen Carcone, a Certified Financial Planner and the Director of Wealth Planning Strategies for TIAA in Boston.“Partnering with an advisor to create a more customized portfolio that considers tax efficiency can help to reduce your exposure to that net investment income tax,” says Carcone.The full list of income threshold amounts for Medicare surtaxes are below
:Filing StatusThreshold AmountHead of household (with a qualifying person)$200,000Married filing jointly$250,000Married filing separately$125,000Single$200,000Qualifying widow(er) with dependent child$250,000
Article sourcesArticle sourcesNerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.Internal Revenue Service. Find out if Net Investment Income Tax applies to you. Accessed Jan 23, 2026.About the author DuranaAlieza Durana is a former investing writer at NerdWallet. She has over a decade of journalism experience covering housing, labor, gender and public policy issues for the Eviction Lab, The Fuller Project for International Reporting, New America and Slate. Her work has appeared in USA Today, The Washington Post, The Atlantic and Harvard Business Review. She is based in St. George, Utah.How Federal Tax Brackets and Rates WorkBy Sabrina Parys, Tina Orem2025 Tax Brackets and Federal Income Tax RatesBy Bella Avila2026 Tax Brackets and Federal Income Tax RatesBy Bella AvilaStandard Deduction for 2026: Amounts, When to TakeBy Sabrina Parys, Tina OremCapital Gains Tax: Long and Short-Term Rates for 2025-2026By Sabrina Parys, Tina Orem25 Popular Tax Deductions and Tax Breaks for 2025-2026By Sabrina Parys, Tina Orem
