Explainer · payroll withholding

Medicare tax has no wage limit

If your Social Security withholding stopped in August but a Medicare line is still on every paycheck, nothing is wrong. The two taxes have different ceilings — one has none.

Social Security tax stops at $192,300 of earnings in 2027. Medicare tax does not stop at all: 1.45% applies to every dollar, and earnings above $200,000 single or $250,000 joint carry an extra 0.9%.

Social Security ceiling (2027)
$192,300
Medicare rate
1.45%
No ceiling
Additional Medicare surtax
0.9%
Above $200k / $250k
Combined employee rate
7.65%
6.2% + 1.45%

Verified 2026-11-07

The two taxes, side by side

Social Security (OASDI) Medicare (HI)
Employee rate 6.2% 1.45%
Employer rate 6.2% 1.45%
Self-employed 12.4% 2.9%
Wage limit in 2027 $192,300 None
Additional surtax None 0.9% above $200,000 / $250,000

What you see on a pay stub

Withholding is applied to cumulative wages. Once year-to-date pay passes the Social Security wage base, that line becomes zero for the rest of the year. The Medicare line does not change, because there is no cumulative threshold to cross.

This is why a high earner’s take-home pay jumps in the last months of the year: one tax disappears and the other keeps running at the same rate.

The surtax is easy to miss

The additional 0.9% is not part of the 1.45% rate and is not matched by an employer. It applies to wages above $200,000 for a single filer and $250,000 for a married couple filing jointly. Those thresholds are fixed by statute, so more people cross them each year purely through wage growth.

If you have two jobs, each employer applies the threshold to its own payroll only. You may owe the surtax at filing even if neither employer withheld it.

Questions

Why does Medicare tax continue after Social Security tax stops?

Because only the Social Security portion has a wage base. Medicare has no taxable maximum, so the 1.45% applies to all earnings for the whole year.

Is the 0.9% surtax matched by my employer?

No. The additional Medicare tax is withheld only from the employee. Employers do not match it.

Are the $200,000 and $250,000 thresholds indexed for inflation?

No. They are fixed by statute and have not changed since the surtax took effect in 2013.

Do the 2027 wage base changes affect Medicare?

No. The wage base applies to Social Security only. Medicare withholding is unaffected by the annual wage base announcement.

Sources: SSA 2027 COLA fact sheet · SSA contribution and benefit base . Verified 2026-11-07. WageBase is independent and not affiliated with the SSA.