The Medicare Tax Rate: 1.45%, 2.9%, and the 0.9% Surtax Explained

The Medicare tax rate for 2025 and 2026 is 1.45% on the employee side and 1.45% on the employer side, for a combined 2.9% on all covered wages. The IRS confirms these figures in Tax Topic 751, and they have not changed for years. If you earn a paycheck, the 1.45% comes straight out of your gross Medicare wages, and you’ll see it as a separate line from the income tax that’s withheld based on your W-4. Your employer matches that 1.45% out of its own pocket, so the federal government collects 2.9% per worker, but only half of it shows up on your stub.

The Medicare tax rate is flat, which sets it apart from the income tax. There are no brackets, no graduated rates, and no standard deduction reducing the base. Whether you earn $30,000 or $3 million, the rate on your wages is the same 1.45%. What changes at higher incomes isn’t the base 1.45% rate. It’s the addition of a second layer, the 0.9% Additional Medicare Tax, which I’ll come back to below.

The detail that catches people off guard is the absence of a wage cap. Social Security tax, the other half of FICA, stops once your wages reach the annual wage base. The Social Security Administration set that base at $176,100 for 2025 and $184,500 for 2026. Once you cross it, the 6.2% Social Security tax stops for the rest of the year. Medicare has no equivalent ceiling. Per Topic 751, all covered wages are subject to Medicare tax. So a high earner watching their Social Security tax disappear mid-year keeps paying the Medicare tax on every remaining paycheck.

That uncapped design is why the Medicare tax rate matters more to high earners than the headline 1.45% suggests. Consider someone earning $500,000 in W-2 wages in 2026. Their Social Security tax tops out at 6.2% of $184,500, roughly $11,439, and stops. But their Medicare tax is 1.45% of the full $500,000, which is $7,250, plus the 0.9% surtax on the $300,000 above the $200,000 single threshold, another $2,700. The Medicare bill of $9,950 on the employee side ends up nearly matching the Social Security bill, even though Social Security has the higher headline rate. People assume the 6.2% tax is always the bigger one. For high earners, the Medicare tax rate quietly catches up because it never stops.

It helps to picture where the money actually goes. The 1.45% Medicare tax funds Medicare Part A, the hospital insurance program that covers inpatient care for people 65 and older and certain younger people with disabilities. That’s why you see it labeled “hospital insurance” in the IRS materials. It is genuinely a dedicated tax, not a slice of general income tax, which is part of why it applies even to income you’ve sheltered from income tax through retirement contributions.

On that point, here’s the trap that catches diligent savers. Medicare wages, shown in Box 5 of your W-2, are calculated differently from your income-tax wages in Box 1. A traditional 401(k) contribution reduces Box 1, lowering your income tax, but it does not reduce Box 5. So your Medicare tax keeps applying to the income you deferred into your retirement plan. Someone who maxes out a $23,500 traditional 401(k) deferral in 2025 still pays the 1.45% Medicare tax on that full amount. People expect their Medicare withholding to drop when they ramp up retirement savings, and it doesn’t, because the law treats Medicare wages as a broader base on purpose. The same goes for most pre-tax health and dependent-care benefits in the sense that they reduce some payroll taxes but the specific items that escape Medicare tax are narrow, so don’t assume a deduction that lowers your income tax also shrinks your Medicare tax.

For 2024, the answer was identical: 1.45% employee, 1.45% employer, 2.9% total, no Medicare cap, same 0.9% surtax thresholds. The only thing that moved between 2024, 2025, and 2026 was the Social Security wage base, which has nothing to do with Medicare. So if you’re comparing years, the Medicare tax rate is the stable part of the picture. The variable is whether your income crossed into 0.9% surtax territory, and given that those thresholds are frozen at the same dollar figures since 2013, more workers cross that line each year as wages rise with inflation. A worker who got a few raises since 2020 may find themselves owing the surtax now even though their real, inflation-adjusted income barely moved.

One more practical wrinkle for New York City employees: the Medicare tax is purely federal, but it sits on top of a stack that also includes federal income tax withholding, New York State income tax, and New York City resident income tax. A six-figure earner in the city can watch a meaningful share of each paycheck disappear before they ever touch it, and the 1.45% Medicare line is easy to overlook against the bigger income-tax numbers. It still adds up. On a $250,000 salary, the employee-side Medicare tax alone (1.45% on $200,000 plus 2.35% on the next $50,000) is $4,075 for the year, separate from everything the state and city take. Knowing the rate is fixed at 1.45% lets you forecast that number precisely rather than guessing, which is the whole point of understanding a flat tax: there is no bracket math to do, just multiply.

If you are checking your own pay stub against this, compare your year-to-date Medicare withholding to 1.45% of your year-to-date Medicare wages (Box 5 territory, not Box 1). They should match almost exactly until you cross $200,000, at which point the rate on the excess jumps to 2.35% because the 0.9% kicks in. A mismatch usually means either a mid-year employer change or a payroll error worth flagging.

The common mistake is treating the Medicare tax rate as something that fluctuates annually like tax brackets or the standard deduction. It doesn’t. If your Medicare tax went up year over year, it’s because your wages went up, not because the rate changed. If you want to see how Medicare tax fits alongside Social Security in the broader payroll picture, our FICA tax rate guide walks through the full 7.65% combined employee rate and where each piece goes, and it’s the natural companion to this page if payroll tax math is what brought you here.

The 0.9% Additional Medicare Tax is a surtax on top of the regular 1.45% Medicare tax, and it applies only to higher earners. It took effect in 2013 under the Affordable Care Act, and the rate has stayed at 0.9% ever since. You owe it once your Medicare wages, self-employment income, or railroad retirement compensation cross a threshold set by your filing status. The IRS lists those thresholds in its Additional Medicare Tax Q&A: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for single, head of household, and qualifying surviving spouse filers.

The 0.9% applies only to the income above your threshold, not to your whole income. So if you’re single and earn $260,000 in wages, you pay the regular 1.45% on the full amount, plus the extra 0.9% on the $60,000 that sits above $200,000. That $60,000 is taxed at the combined employee Medicare rate of 2.35%. The first $200,000 stays at 1.45%. This is a marginal surtax, not a cliff that retroactively taxes everything once you cross the line. Crossing the threshold by one dollar costs you less than a penny in extra tax, not a sudden lump.

Two features of the 0.9% surtax make it different from the base Medicare tax. First, there’s no employer match. The regular 1.45% is split evenly between you and your employer, but per Topic 751, the 0.9% Additional Medicare Tax has no employer portion. It comes entirely out of your pocket. Second, your employer’s withholding obligation is mechanical and doesn’t account for your filing status. The IRS requires an employer to begin withholding the 0.9% once it pays you more than $200,000 in a calendar year, full stop, regardless of whether you’re married or single. That mismatch between the flat $200,000 withholding trigger and the filing-status-based liability threshold is where most surprises come from.

Here’s a worked example. A married couple files jointly. One spouse earns $180,000, the other earns $190,000, for $370,000 combined. Neither employer crosses the $200,000 single-employee withholding trigger, so no 0.9% is withheld from either paycheck all year. But their joint threshold is $250,000, and they earned $370,000, so they owe 0.9% on $120,000, which is $1,080. That entire $1,080 lands as a surprise at filing time because nothing was withheld. They reconcile it on Form 8959, which is where every taxpayer computes the surtax and compares it against what was actually withheld.

The reverse can also happen. A single person earning $210,000 from one employer has 0.9% withheld on the $10,000 above $200,000, which is correct, about $90. But a single person who earns $210,000 split between two $105,000 jobs has nothing withheld (neither job hit $200,000) and owes $90 at filing on the $10,000 above their $200,000 threshold. Same income, same liability, different withholding, and the second person owes at tax time while the first comes out even. The tax owed is identical. Only the timing and the withholding differ.

There’s a flip side worth knowing too. Because your employer keys off the flat $200,000 trigger and ignores filing status, married-filing-jointly couples where one spouse earns over $200,000 alone see that spouse’s employer withhold the 0.9% starting at $200,000, even though the couple’s joint threshold is $250,000. In that case some 0.9% gets withheld on income between $200,000 and $250,000 that isn’t actually subject to the surtax at the couple level, and Form 8959 trues it up, sometimes producing a small refund of over-withheld surtax. The form exists precisely because the withholding rule and the liability rule don’t line up.

The Additional Medicare Tax also reaches self-employment income and combines income types. If you have both a W-2 job and a side business, you add your Medicare wages and your net self-employment earnings together against the single threshold. A consultant with a $150,000 salary and $80,000 of Schedule C profit has $230,000 of combined Medicare-taxable income and, if single, owes 0.9% on the $30,000 over $200,000, about $270. One sequencing rule matters here: your wages reduce the threshold available for your self-employment income, so you don’t get two separate thresholds. The wages are tested first, then the remaining threshold applies to your self-employment earnings.

It is worth being clear about how Form 8959 actually does the reconciliation, because the structure explains the surprises. The form has you total your Medicare wages, apply your filing-status threshold, and compute the 0.9% on the excess. Then in a separate part it pulls the Additional Medicare Tax your employers already withheld (which they reported in box 6 of your W-2 alongside the regular Medicare tax). The difference flows to your Form 1040 as either additional tax owed or as withholding credited toward your total tax. So the 0.9% is never lost or double-counted, but the timing of when you feel it depends entirely on whether your employers withheld it during the year.

For a high earner trying to avoid an April balance, the cleanest fix is usually extra withholding through your W-4 rather than relying on quarterly estimates, because withholding is treated as paid evenly through the year and sidesteps the underpayment penalty timing rules. A dual-income couple where each spouse earns $160,000 can each ask their employer to withhold an additional amount that, combined, covers the roughly $0.9% on their joint income above $250,000. Running that number in advance beats discovering a four-figure surtax balance when you file.

The common mistake is assuming withholding always matches your final liability. It frequently doesn’t for two-income households or people with multiple jobs, and that’s not an error by anyone, it’s how the rules are written. If you’re a high earner with a working spouse or a second job, expect a small Additional Medicare Tax balance and plan for it, either through extra W-4 withholding or quarterly estimates. Because the $200,000 and $250,000 thresholds are not indexed for inflation, the pool of people owing this surtax expands every year as wages rise. If you’re newly in this range, our tax strategy consulting team can help you set withholding so the 0.9% doesn’t become an April surprise.

No. There is no wage cap on Medicare tax, and that’s the feature that separates it most sharply from Social Security tax. The IRS states it directly in Tax Topic 751: there is no wage base limit for Medicare tax, and all covered wages are subject to it. Every dollar of your Medicare wages carries the 1.45% rate, with no ceiling, in 2024, 2025, and 2026 alike. There has never been a year with a Medicare wage cap since the tax was uncapped in the early 1990s.

Contrast that with Social Security. The Social Security portion of FICA only applies up to an annual wage base that the Social Security Administration adjusts each year for inflation: $168,600 in 2024, $176,100 in 2025, and $184,500 in 2026. Once your wages reach that base, the 6.2% Social Security tax stops for the rest of the year. Many high earners notice their paycheck gets slightly larger in the fall, and that’s the Social Security tax shutting off. The Medicare tax never does that. It keeps coming out of every check, all year, every year, no matter how high your income climbs.

This design has a real consequence for the way the two taxes feel at different income levels. At modest incomes, Social Security is the heavier tax because 6.2% is more than 1.45%. But as income rises past the Social Security wage base, the Medicare tax keeps accumulating while Social Security is frozen. For a worker earning several hundred thousand dollars, Medicare tax, especially with the 0.9% surtax stacked on, can rival or exceed the total Social Security tax paid, even though Social Security has the higher rate on the capped portion. The no-cap rule is what makes that flip possible.

A concrete example shows the gap. Take someone earning $1,000,000 in W-2 wages in 2026. Social Security tax is 6.2% of the $184,500 wage base, which is $11,439, and then it stops. Medicare tax is 1.45% on the full $1,000,000, which is $14,500, plus the 0.9% surtax on the $800,000 above the $200,000 single threshold, another $7,200. Their employee-side Medicare cost is $21,700, roughly double their Social Security cost, purely because Medicare has no cap and Social Security does. The higher the income, the more lopsided this gets, and at $2 million or $3 million the Medicare bill dwarfs the Social Security one.

For the self-employed, the same no-cap rule applies to the Medicare portion of self-employment tax. The IRS self-employment tax page explains that while the 12.4% Social Security portion of SE tax stops at the wage base, the 2.9% Medicare portion applies to all of your net self-employment earnings with no limit. A consultant netting $400,000 pays the 2.9% Medicare SE tax on the full base, not just the first $184,500. So a successful sole proprietor feels the uncapped Medicare tax even more directly than an employee, because they pay both halves of it on every dollar of profit.

This uncapped structure is also why some business owners weigh an S corporation election. Inside an S corp, the owner takes a reasonable salary subject to Medicare tax, and remaining profits pass through as distributions that are not subject to Medicare tax. That can reduce the Medicare tax base compared to a sole proprietorship where all profit is hit. The tradeoff is real and not free: the IRS requires the salary to be reasonable for the work performed, payroll adds cost and compliance, and underpaying yourself to dodge the tax invites scrutiny. This isn’t a recommendation to elect anything, just an explanation of why the no-cap Medicare rule drives entity-planning conversations for higher earners. Whether it makes sense depends on your profit level, your industry’s pay norms, and your appetite for running payroll, which is exactly the kind of thing to model out before deciding.

Some people ask whether they can ever recover Medicare tax they paid, the way they might true up over-withheld income tax through a refund. The base 1.45% Medicare tax is not refundable, it is a dedicated payroll tax, not a prepayment of income tax. The only Medicare tax that can come back to you is over-withheld 0.9% Additional Medicare Tax, and only because Form 8959 reconciles what your employer withheld against your actual filing-status liability. There is no scenario where the regular 1.45% comes back, regardless of how high your income climbs.

Here is a side-by-side that makes the no-cap point land. In 2026, the Social Security wage base is $184,500. A worker earning exactly $184,500 pays $11,439 in Social Security tax (6.2%) and $2,675 in Medicare tax (1.45%), and both taxes touch every dollar. A worker earning $369,000, exactly double, pays the same $11,439 in Social Security tax (it is capped) but $5,351 in base Medicare tax plus the 0.9% surtax on the $169,000 above the $200,000 single threshold, roughly $1,521 more. Double the income, identical Social Security tax, more than double the Medicare tax. That is the no-cap rule doing its work.

The policy reason behind the asymmetry is that Social Security benefits are themselves capped, so taxing wages above the base would not buy you more retirement benefit. Medicare benefits, by contrast, are not tied to how much Medicare tax you paid, so the tax keeps applying without any benefit ceiling. You do not earn a bigger Medicare benefit by paying more Medicare tax. That disconnect is exactly why high earners sometimes feel the Medicare tax is the least visible and least appreciated line on their pay stub, even as it quietly grows with their income year after year.

The common misunderstanding is conflating the Social Security cap with Medicare. People hear “the FICA cap” and assume both halves stop at the same point. Only Social Security stops. If you’ve ever seen advice that says payroll taxes end once you hit a certain income, it’s talking about Social Security only, and applying that assumption to Medicare will understate what a high earner actually owes by thousands of dollars. Because the Medicare tax has no cap and the 0.9% thresholds aren’t indexed, the long-term direction is clear: Medicare tax claims a growing share of high earners’ income each year. Our guide to the maximum Social Security tax covers the capped side of the equation if you want to see exactly where Social Security stops and Medicare keeps going.

If you’re self-employed, you pay both halves of the Medicare tax yourself, because you’re both the employee and the employer. The mechanism is self-employment tax, sometimes called SECA, and the IRS self-employment tax page states the total rate at 15.3%: 12.4% for Social Security and 2.9% for Medicare. That 2.9% is the entire Medicare tax, the employee 1.45% plus the employer 1.45%, both falling on you. A W-2 employee only sees half the Medicare tax. A sole proprietor or partner pays the whole thing.

You don’t apply the rate to your gross revenue or even to your full net profit. Schedule SE first reduces your net earnings to 92.35% before applying the rates. The 0.9235 multiplier is built into the form, and it roughly accounts for the fact that an employer’s share of payroll tax would normally be a deductible business expense, so the law shrinks the base to keep self-employed people on similar footing to employees. So your starting point isn’t your $100,000 net profit, it’s $92,350.

Here’s the worked example. Your Schedule C nets $100,000 in 2025. Multiply by 0.9235 to get a self-employment tax base of $92,350. The Medicare portion is 2.9% of $92,350, which is $2,678. The Social Security portion would be 12.4% of $92,350, since that’s under the $184,500 wage base, but this guide is about the Medicare piece. Unlike Social Security, the Medicare 2.9% applies to your entire base no matter how large, because the Medicare tax has no cap. If your Schedule C netted $500,000, the SE tax base would be $461,750, and the 2.9% Medicare portion would be about $13,391, with no ceiling cutting it off.

There’s a deduction that softens the blow. You get to deduct the employer-equivalent portion of your self-employment tax, roughly half, as an above-the-line adjustment to income. The IRS is explicit that this deduction reduces your income tax only. It does not reduce your self-employment tax or your net earnings from self-employment. So the deduction lowers what you owe in income tax but doesn’t claw back any of the Medicare tax itself. It’s a partial offset, not a refund, and it shows up as an adjustment on Schedule 1 of your Form 1040.

High-earning self-employed people also owe the 0.9% Additional Medicare Tax, just like high-wage employees. The thresholds are the same: $200,000 single, $250,000 married filing jointly, $125,000 married filing separately. If your net self-employment income crosses your threshold, you add 0.9% on the excess, computed on Form 8959 alongside any wage-based surtax. Someone with both a W-2 job and a side business combines the two income streams against the single threshold, so a freelancer with a $150,000 salary and $90,000 of consulting income would owe the 0.9% on the $40,000 over the $200,000 single threshold, about $360.

One subtlety on the 0.9% for the self-employed: the threshold itself is reduced dollar-for-dollar by your W-2 wages before it’s applied to your self-employment income. So if a single filer has $180,000 in wages, their remaining threshold for self-employment income is $20,000 ($200,000 minus the $180,000 of wages), and any net SE earnings above that $20,000 carry the 0.9%. This sequencing prevents people from getting two separate $200,000 thresholds for wages and self-employment income, and it’s a detail that surprises mixed-income earners the first time their CPA walks through Form 8959 with them.

It also catches people that the Medicare portion of SE tax applies even after you start collecting Social Security or Medicare benefits yourself. The IRS notes the self-employment tax rules apply no matter your age and even if you are already drawing benefits. So a semi-retired consultant in their seventies still owes the 2.9% Medicare SE tax on net earnings, with no senior exemption and no cap. Age does not switch off the tax.

A second mistake among the self-employed is confusing self-employment tax with income tax and assuming a business loss or large deductions will wipe out the Medicare piece. Self-employment tax is computed on your net earnings from self-employment, which is roughly your Schedule C profit, before your personal itemized or standard deduction and before most income-tax-only adjustments. So a freelancer who nets $120,000 but has enough itemized deductions to owe little federal income tax can still owe the full 2.9% Medicare SE tax (plus 12.4% Social Security up to the wage base) on the $110,820 SE base. The two taxes run on different tracks, and the Medicare track has no cap and few offsets.

The flip side: a genuine business loss does reduce or eliminate self-employment tax, because there are no net earnings to tax. And if you operate through a partnership, your share of ordinary partnership income is generally subject to SE tax and its Medicare component, while certain limited-partner allocations may not be, a fact-specific area where the rules get technical fast. The headline stays the same though, on every dollar of self-employment earnings that is subject to the tax, the Medicare rate is 2.9% with no upper limit, which is why managing entity structure and reasonable compensation is where most of the planning happens.

The common mistake among the newly self-employed is forgetting that nobody is withholding any of this. As an employee, Medicare tax came out automatically, paycheck by paycheck, invisible. On your own, you owe it through quarterly estimated tax payments, and missing those payments triggers underpayment penalties even if you pay in full at filing. The 2.9% Medicare SE tax is real money on every dollar of profit, with no cap, and it’s easy to underestimate in your first profitable year when the cash is flowing but no tax is being set aside. A rough planning rule many self-employed people use is to reserve 25% to 30% of net profit for federal taxes, with the Medicare and Social Security SE tax being a big chunk of that. That reserve plus quarterly payments keeps the year-end bill from becoming a crisis. If you’ve recently gone out on your own or formed an LLC, our business management team can map out your SE tax and estimated payment schedule so the bill doesn’t blindside you.

The Medicare tax rate in 2024 was 1.45% for the employee and 1.45% for the employer, 2.9% combined, with the same 0.9% Additional Medicare Tax on high earners. That’s identical to 2025 and 2026. If you searched specifically for the 2024 figure, the short answer is that nothing about the Medicare tax rate changed across these years. The IRS has published the same 1.45% / 2.9% structure consistently, and the rate hasn’t moved in decades.

The 0.9% Additional Medicare Tax thresholds were also the same in 2024 as they are now: $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately. These thresholds have been fixed at those exact dollar amounts since the surtax began in 2013, per the IRS Additional Medicare Tax Q&A. They are not adjusted for inflation, which is unusual for tax thresholds and has a quiet but real effect: as wages climb with inflation each year, more taxpayers cross into surtax territory without any change in the law. A $200,000 income in 2013 had far more purchasing power than $200,000 today, yet the threshold is identical. This is sometimes called bracket creep, and the frozen Medicare surtax thresholds are a textbook case.

What did change between 2024 and 2026 is the Social Security wage base, and it’s worth being precise that this is a Social Security figure, not a Medicare one. The Social Security Administration raised the wage base from $168,600 in 2024 to $176,100 in 2025 to $184,500 in 2026. That base caps the 12.4% Social Security tax. It does not touch Medicare, which stays uncapped every year. So if a 2024 article mentioned a payroll tax limit increasing, that was Social Security, and it has no bearing on the Medicare tax rate. Mixing those two up is the single most common confusion in payroll tax write-ups.

Here’s a comparison to make the stability concrete. A single person earning $250,000 in 2024 paid Medicare tax of 1.45% on $200,000 ($2,900) plus 2.35% on the $50,000 above the threshold ($1,175), for $4,075 on the employee side. The same person earning the same $250,000 in 2026 pays the exact same $4,075 in Medicare tax, because neither the rate nor the threshold changed. Their Social Security tax would differ slightly between the two years because the wage base rose, but the Medicare math is frozen down to the dollar.

It’s also worth noting what wasn’t on the table. There were proposals over the years to raise the Medicare tax rate on high earners or to apply the surtax more broadly to pass-through income, but as of 2026 the statutory Medicare tax rate remains 1.45% / 1.45% with the 0.9% add-on at the same thresholds. The Net Investment Income Tax, a separate 3.8% tax on investment income above similar thresholds, is sometimes confused with the Additional Medicare Tax because the rate components look related (0.9% plus 2.9% equals 3.8%), but they’re distinct taxes. The 0.9% Additional Medicare Tax hits earned income (wages and self-employment), while the 3.8% Net Investment Income Tax hits passive income like interest, dividends, and capital gains. A high earner can owe both, on different slices of income, in the same year, which is why a $300,000 wage earner with a large brokerage account can see two separate surtaxes on the same return.

The practical lesson is about planning, not rate-watching. Since the Medicare tax rate is stable and the surtax thresholds don’t move, the variable you actually control is whether and by how much your income crosses $200,000 or $250,000. Two-income couples in particular should run the numbers, because their combined income can cross the $250,000 joint threshold even when neither spouse’s employer withholds the 0.9%, leaving a balance due on Form 8959. A common mistake is assuming a year-over-year rate increase caused a bigger tax bill, when the real cause is simply earning more against a frozen threshold.

One forward-looking caveat: while the statutory rate has been stable, Medicare funding pressures are a recurring topic in federal budget debates, and the surtax thresholds remaining unindexed is itself a slow-motion tax increase on a widening group of earners. None of that changes the rate you owe today, but it is the reason the smart move is to model your Medicare exposure under your current income rather than assume the rules will loosen. Plan for the rate that exists, not the one you hope for.

If you are reconstructing prior-year numbers, say to amend a 2024 return or check a 2023 figure, the same constants apply backward. The 1.45% employee rate, the 2.9% combined rate, and the 0.9% surtax thresholds of $200,000 / $250,000 / $125,000 have been the published figures every year since 2013. The only year-specific number you would swap in is the Social Security wage base, and again, that only affects the Social Security portion, never Medicare. So a 2022 or 2023 Medicare calculation uses the identical rate and thresholds as a 2026 one. That stability is genuinely useful for multi-year planning, because you can model Medicare tax forward and backward without chasing an annual inflation adjustment.

For business owners and high earners in particular, the takeaway is to treat the Medicare tax rate as a fixed input and focus your energy on the variables you can move: how income is classified (wages versus distributions versus passive income), how it is timed across years, and whether the structure you operate through exposes more or less of your earnings to the uncapped 2.9%. A planning conversation that starts from those levers is far more productive than waiting on a rate change.

Looking ahead, expect the Medicare tax rate itself to stay put while the surtax catches more people each year through inflation alone. Planning around the frozen thresholds, the timing of bonuses, retirement contributions that do or don’t reduce Medicare wages, and entity choice for the self-employed all matter more than waiting for a rate change that historically doesn’t come. To see how Medicare tax flows onto your actual return alongside everything else, our guide on how Form 1040 returns work shows where Form 8959 and the Additional Medicare Tax land in the bigger filing picture.