Question

What is the current Medicare tax rate? To what maximum level of salary and wages is this rate applied? Which payroll taxes are the employee’s responsibility and which are the employer’s responsibility?

Answer 1

Current rate for Medicare is 1.45% for employee and 1.45% for employer . In total Medicare tax rate is 2.9%.

There is an additional Medicare tax also which is only applicable for higher income earners, additional rate is 0.9% of income.

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There is no limit on Medicare tax, so Medicare tax will be paid on whatever you earn. There is a limit on social security tax. A person earnings less than $128400 is not required to pay social security tax.

Employee has liability to pay half of 2.9% for Medicare tax and half of 12.4% for social security tax.

Total social security tax and Medicare tax rate is 12.4 and2.9 respectively but only half is paid by employee and other half is paid by employer.