How Much Is the Medicare Levy? (2026 Medicare Tax Explained)

Quick Answer: Is There a Medicare Levy in the US?

No, the United States has no line item called a 'Medicare levy.' That term describes Australia's income-based Medicare funding tax. The US equivalent is the Medicare payroll tax: 1.45% each from employees and employers (2.9% total) in 2026, plus a 0.9% Additional Medicare Tax on wages above $200,000 for single filers or $250,000 for married couples filing jointly.

The Medicare Levy Is Australian; the US Calls It the Medicare Tax

Australia's Medicare levy is a 2 percent charge on taxable income, collected through the Australian Taxation Office to fund that country's universal public health system. Some higher earners without private hospital cover also pay a separate Medicare Levy Surcharge of up to 1.5 percent. Neither term exists in US tax law, and searching 'Medicare levy' on IRS.gov or Medicare.gov returns nothing, because the US system is funded through payroll taxes, not a levy.

Original Medicare in the United States is a federal program run by the Centers for Medicare & Medicaid Services (CMS), and its Hospital Insurance piece, Medicare Part A, is funded by the payroll tax described below rather than an annual income levy. Medicare Part B and Medicare Part D are funded mainly through monthly premiums and general federal revenue, not the payroll tax.

How Much Is the Medicare Tax in 2026?

The standard Medicare tax in 2026 is 2.9 percent of wages, split evenly: employees pay 1.45 percent through payroll withholding and employers pay a matching 1.45 percent. Unlike Social Security, this tax has no annual wage base limit, so every dollar of wages is taxed at the same rate whether someone earns $40,000 or $4 million in 2026.

Self-employed workers pay the Medicare tax through SECA (Self-Employment Contributions Act) instead of FICA. Because there is no separate employer, self-employed people owe the full 2.9 percent themselves on net self-employment earnings, though half of that amount is deductible as an adjustment to income on their 2026 federal tax return.

The Additional Medicare Tax: The 0.9 Percent Surtax for High Earners

The Additional Medicare Tax adds 0.9 percent on top of the standard rate once wages or self-employment income cross a threshold in 2026: $200,000 for single filers, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. Employers must start withholding the extra 0.9 percent once an employee's wages from that one employer exceed $200,000, even if the employee's household income would fall under a joint threshold.

Unlike the standard 1.45 percent, employers never match the Additional Medicare Tax; it is strictly an employee or self-employed-person cost. These thresholds are fixed by statute and have not been adjusted for inflation since they took effect in 2013, so more taxpayers cross them every year as wages rise. Revenue from this surtax also helps fund Affordable Care Act (ACA) premium tax credits, in addition to Medicare's Hospital Insurance Trust Fund.

Is There a Wage Cap on the Medicare Tax?

No wage cap applies to the Medicare tax in 2026, unlike Social Security, which only taxes earnings up to a set wage base each year. Every dollar of Medicare wages and self-employment income is subject to at least the 1.45 percent (or 2.9 percent combined) rate, and income above the Additional Medicare Tax threshold is taxed at 2.35 percent for the employee's share.

The Medicare payroll tax's uncapped design is why it raises more revenue as US wages grow, and it has nothing to do with which Medicare plan someone eventually chooses. Medicare Advantage premiums, Medigap premiums, and Part D premiums are all set separately by private insurers or CMS bidding rules, not by how much Medicare tax a person paid during their working years.

How the Medicare Tax Pays for Your Coverage

Medicare payroll tax revenue flows into the Hospital Insurance Trust Fund, which pays for Medicare Part A: inpatient hospital stays, skilled nursing facility care, hospice, and some home health visits. Working and paying the Medicare tax for at least 40 quarters, about 10 years, is also what earns most people premium-free Part A at age 65, covering roughly 99 percent of beneficiaries in 2026.

People with fewer than 40 quarters of Medicare-taxed work still get Part A, but they pay a monthly premium: $311 in 2026 for those with 30 to 39 quarters, and $565 in 2026 for those with fewer than 30 quarters. Paying the standard Medicare tax throughout a career is effectively how someone prepays Part A before turning 65.

How to Check How Much Medicare Tax You Paid

Employees can find their 2026 Medicare tax withholding on Form W-2: Box 5 shows Medicare wages and Box 6 shows the Medicare tax withheld. Self-employed workers calculate the tax on Schedule SE when filing their federal income tax return, and anyone who owes the Additional Medicare Tax reconciles it on IRS Form 8959, which also credits any extra amount an employer already withheld.

Questions about a specific paycheck or W-2 discrepancy go to an employer's payroll department first, since employers are legally responsible for correct withholding. Broader questions about how the Medicare tax funds coverage, or what to do next when approaching Medicare eligibility, can start with the CoveredUSA screener or a review of Is Medicare Free or Does It Cost Money?

Does the US have a Medicare levy like Australia does?

No. 'Medicare levy' is Australian terminology for a 2 percent income-based tax collected by the Australian Taxation Office. The US funds Medicare through payroll taxes instead: a 1.45 percent Medicare tax on employees, a matching 1.45 percent from employers, and a 2.9 percent SECA tax for self-employed workers in 2026.

How much is the standard Medicare tax in 2026?

The standard Medicare tax is 2.9 percent of wages in 2026, split evenly between employee and employer at 1.45 percent each. There is no annual wage cap, so the tax applies to all Medicare wages regardless of how high someone's income is.

What is the Additional Medicare Tax and who pays it?

The Additional Medicare Tax is a 0.9 percent surtax on wages or self-employment income above $200,000 for single filers, $250,000 for married couples filing jointly, or $125,000 for married filing separately in 2026. It applies only to the employee's or self-employed person's share; employers never match it.

Do self-employed people pay the Medicare tax?

Yes. Self-employed workers pay the full 2.9 percent Medicare tax themselves through SECA rather than splitting it with an employer, on their net self-employment earnings for 2026. Half of the SECA tax is deductible as an adjustment to income on their federal tax return.

Is there an income cap on the Medicare tax?

No. Unlike the Social Security tax, the Medicare tax has no wage base limit in 2026. Every dollar of Medicare wages is taxed, and income above the Additional Medicare Tax threshold is taxed at an even higher combined rate of 2.35 percent for employees.

Does my employer match the Additional Medicare Tax?

No. Employers match the standard 1.45 percent Medicare tax dollar for dollar, but the extra 0.9 percent Additional Medicare Tax is strictly an employee or self-employed-person cost in 2026. Employers are only responsible for withholding it correctly once wages from that employer cross $200,000.

How does the Medicare tax relate to premium-free Part A?

Paying the Medicare tax for at least 40 quarters, about 10 years of work, is what qualifies most people for premium-free Medicare Part A at age 65. Workers with fewer quarters still get Part A but pay a monthly premium of $311 or $565 in 2026, depending on how many quarters they have.

Where can I see how much Medicare tax I paid this year?

Employees can check Box 5 (Medicare wages) and Box 6 (Medicare tax withheld) on their W-2 for 2026. Self-employed workers calculate their Medicare tax on Schedule SE, and anyone subject to the Additional Medicare Tax reconciles it using IRS Form 8959.