Fed MED/EE is a mandatory tax of 1.45% based upon taxable gross earnings.
There is no wage limit for Medicare tax, which is currently 1.45% and applied to all covered wages paid. Both employees and employers have to pay this rate. Once an employee reaches $200,000 in Medicare taxable wages, the employee is subject to an extra 0.9% Medicare tax withholding. UCPath reflects the additional .9% tax as a separate deduction.
1. What is the Medicare tax deduction on my paycheck?
Fed MED/EE is a mandatory tax of 1.45% based upon taxable gross earnings.
Fed Addl Med is a mandatory tax of .9% based upon annual taxable gross earnings above $200,000.
2. Can I opt out of Medicare deduction?
No. This is a mandatory tax of 1.45 % based upon taxable gross earnings.
3. Why is my Medicare tax higher?
As part of the health care reform under the Affordable Care Act, the employee portion of the FICA Medicare payroll tax rate for high-income earners increased by 0.9% beginning in 2013. Some taxpayers may be required to pay an Additional Medicare Tax if their income is over a certain limit.
For more information, review the IRS What is the Additional Medicare Tax?
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