Medicare Wages

Your Medicare wages are the portion of your earnings that you will have to pay Medicare taxes on. Most Americans’ wages are subjected to this tax. Paying Medicare taxes for 40 quarters or more, equivalent to 10 years, gives you access to premium-free Medicare Part A once you are eligible for enrollment.

Christian Simmons, writer and researcher for RetireGuide
  • Written by
    Christian Simmons

    Christian Simmons

    Financial Writer

    Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics. Christian is a former winner of a Florida Society of News Editors journalism contest and has written professionally since 2016.

    Read More
  • Edited By
    Lamia Chowdhury
    Lamia Chowdhury, editor for

    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.

    Read More
  • Published: April 13, 2022
  • Updated: April 21, 2022
  • 3 min read time
  • This page features 3 Cited Research Articles
Fact Checked
Fact Checked

Our fact-checking process starts with vetting all sources to ensure they are authoritative and relevant. Then we verify the facts with original reports published by those sources, or we confirm the facts with qualified experts. For full transparency, we clearly identify our sources in a list at the bottom of each page.

Cite Us
How to Cite's Article

APA Simmons, C. (2022, April 21). Medicare Wages. Retrieved September 29, 2022, from

MLA Simmons, Christian. "Medicare Wages.", 21 Apr 2022,

Chicago Simmons, Christian. "Medicare Wages." Last modified April 21, 2022.

Why Trust
Why You Can Trust Us

Content created by RetireGuide and sponsored by our partners.

Key Principles

RetireGuide’s mission is to provide seniors with resources that will help them reach important financial decisions that affect their retirement. Our goal is to arm our readers with knowledge that will lead to a healthy and financially sound retirement.

We’re dedicated to providing thoroughly researched Medicare information that guides you toward making the best possible health decisions for you and your family.

RetireGuide LLC has partnerships with Senior Market Sales (SMS) and GoHealth.

Our partners are able to be reached through the phone numbers and/or forms provided on our website.

The content and tools created by RetireGuide adhere to strict Medicare and editorial guidelines to ensure quality and transparency.

Editorial Independence

While the experts from our partners are available to help you navigate various Medicare plans, RetireGuide retains complete editorial control over the information it publishes.

We operate independently from our partners, which allows the award-winning RetireGuide team to provide you with unbiased information.

Visitors can trust our inflexibility regarding our editorial autonomy. We do not allow our partnership to influence RetireGuide’s editorial content whatsoever.

What Are Medicare Wages?

Medicare is similar to many other government programs in that the program is funded through taxpayer dollars. According to the U.S. Centers for Medicare & Medicaid Services, the total amount spent on Medicare reached nearly $830 billion in 2020. The trade-off for you having access to affordable Medicare coverage in retirement is that you must make regular contributions to the program throughout your income-earning years.

The Medicare tax is deducted from your paychecks through a payroll tax known as FICA, or the Federal Insurance Contributions Act. This tax, which virtually all working Americans must pay, supports the funding of both the Medicare and Social Security programs. In addition to the portion of the Medicare tax you pay, your employer pays a matching tax on your Medicare wages.

Medicare Wages vs. Gross Wages

Your Medicare wages differ from your gross wages. Before Medicare taxes are applied to your wages, certain things are subtracted from your gross wages, such as your payments to medical insurance and life insurance plans. The amount left over after subtracting those costs is known as your Medicare wages, and your Medicare wages are the amount you will pay Medicare taxes on.

Your gross wages are typically the total amount of income you have earned before anything else is subtracted.

What Is the Medicare Tax Rate?

According to rates set by the Internal Revenue Service, the current Medicare tax rate is 1.45%. This tax is paid by both you and your employer, who contributes a matching 1.45%.

There is no cap on the amount of your Medicare wages that are subject to the Medicare tax. However, if your Medicare wages are above $200,000 in a year, then you will owe an additional 0.9% Medicare tax on the excess wages. This tax is a relatively new addition, going into effect in 2013 to help fund the Affordable Care Act.

For married couples who file jointly, wages above $250,000 will be subject to the additional tax. If you are married but filing separately, the additional tax kicks in only if your combined Medicare wages exceed $125,000.

If you are self-employed, you must pay a 2.9% Medicare tax on your Medicare wages instead of the typical 1.45%. This is because you are essentially paying both parts of the tax: the amount you owe (1.45%) and the matched amount an employer would pay (1.45%).

All income earners must also pay Social Security taxes on top of your Medicare taxes. The current Social Security tax rate is 6.2%, and this amount, just like the Medicare tax, must be matched by your employer.

Clipboard with Medicare Info Need FREE Medicare Help?
Our Medicare experts will help you compare, build, and enroll in a plan that gets you the coverages you need at a price you can afford.

Medicare Tax Exemptions

Typically, everyone who works and receives an earned income must pay Medicare taxes. There are no exemptions to this tax for self-employed workers or other special scenarios.

But there are some exemptions that apply to what is considered part of your Medicare wages. Any contributions you make toward your retirement, such as contributions to a 401(k) account or other pre-tax deductions, are not factored into your Medicare wages and, therefore, won’t be considered part of your earnings that are taxed by Medicare.

Exemptions to FICA taxes do exist for students. If a student is being paid by the school and is also studying at the school, their earnings will not be taxed, either by Medicare or by Social Security.

Last Modified: April 21, 2022

3 Cited Research Articles

  1. Internal Revenue Service. (2022, March 15). Topic No. 751 Social Security and Medicare Withholding Rates. Retrieved from
  2. Internal Revenue Service. (2022, January 21). Student Exception to FICA Tax. Retrieved from
  3. U.S. Centers for Medicare & Medicaid Services. (2021, December 15). NHE Fact Sheet. Retrieved from