A separate, lower-rate tax from NIIT — this applies to earned income (wages and self-employment income) above its own threshold, and the two taxes can both apply to a high earner without double-taxing the same dollars.
How it works
Medicare wages above the threshold are taxed at 0.9% first. Self-employment income is then tested against whatever threshold room remains after wages are counted, not against the full threshold again.
What this does not include
This doesn’t handle a scenario with a working spouse’s wages also counting toward a joint threshold — married filing jointly combines both spouses’ Medicare wages and self-employment income against the one $250,000 threshold, a combination this single-filer-style calculator doesn’t model directly.
How to use this calculator
- Enter Medicare wages, self-employment income, and the threshold for your filing status.
Frequently asked questions
Is Additional Medicare Tax matched by the employer?
No — unlike standard Medicare tax, employers don’t match the Additional Medicare Tax; it’s solely an employee/self-employed person’s tax.
Does my employer automatically withhold this?
Employers must withhold Additional Medicare Tax once wages from that single employer exceed $200,000, regardless of filing status — which can under- or over-withhold relative to the actual threshold based on total household income.
What funds does this tax support?
It helps fund Affordable Care Act provisions, including the premium tax credit, rather than the traditional Medicare trust fund alone.
