Medicare vs Social Security: one has a cap, one does not
Two taxes with the same collection mechanism and opposite structures. The difference in your paycheck grows with every dollar above the wage base.
Social Security stops; Medicare does not. The 6.2% tax applies only to the first $192,300 of wages — a maximum of $11,922.60. The 1.45% Medicare tax applies to all wages, and an extra 0.9% starts above $200,000 single or $250,000 joint.
Verified 2026-11-07 · SSA 2027 COLA fact sheet
See where the capped tax stops on your pay
The panel reports the Social Security side. Medicare withholding is not shown because there is nothing to cap: it continues at 1.45% on every dollar, at every wage level, for the whole year.
The structural difference
| Feature | Social Security (OASDI) | Medicare (HI) |
|---|---|---|
| Employee rate | 6.2% | 1.45% |
| Employer rate | 6.2% | 1.45% |
| Self-employed rate | 12.4% | 2.9% |
| Earnings subject to tax | First $192,300 | All earnings |
| Additional surtax | None | 0.9% above $200,000 single / $250,000 joint |
| Maximum employee tax, 2027 | $11,922.60 | None |
| Maximum self-employed Social Security part | $23,845.20 | None |
What it looks like at different salaries
| Annual wages | Social Security 6.2% | Medicare 1.45% | 0.9% surtax, single | 0.9% surtax, joint |
|---|---|---|---|---|
| $100,000 | $6,200.00 | $1,450.00 | — | — |
| $192,300 | $11,922.60 | $2,788.35 | — | — |
| $250,000 | $11,922.60 | $3,625.00 | $450.00 | — |
| $500,000 | $11,922.60 | $7,250.00 | $2,700.00 | $2,250.00 |
Employee-side amounts only. The employer pays a matching 6.2% and 1.45% and no part of the 0.9% surtax.
Why the cap exists at all
Social Security is an insurance program with a benefit formula tied to earnings. The wage base is the point above which additional earnings no longer count toward that formula, so the tax stops there too. Earnings above $192,300 are not taxed and do not raise your benefit — the two facts are the same rule seen from opposite sides.
Medicare Part A has no earnings-linked benefit formula. Everyone who qualifies pays nothing for inpatient hospital coverage at 65, whether they earned $40,000 or $4,000,000. With no benefit ceiling to match, there is no tax ceiling. Part B and Part D premiums are income-related, but the 1.45% payroll tax itself is flat and unlimited.
The two thresholds for the 0.9%
The additional Medicare tax is 0.9% of wages above $200,000 for a single filer and $250,000 for a married couple filing jointly. Those thresholds are not indexed and do not double for two earners: a couple with two $150,000 salaries crosses the joint threshold even though neither employer ever withholds the surtax, because withholding starts at $200,000 per employer. The reconciliation happens on Form 8959 with the annual return.
Self-employed: same split, different arithmetic
A self-employed person pays 12.4% and 2.9% instead of 6.2% and 1.45%, because there is no employer to pay the other half. Both rates apply to 92.35% of net earnings rather than to net earnings itself. The 12.4% is capped at $192,300 of that base — a maximum of $23,845.20 — and the 2.9% is not capped at any level. Half of the combined tax is deductible from gross income.
Questions
Why is there a cap on Social Security tax but not on Medicare tax?
The wage base limits the earnings that count toward the Social Security benefit formula, so the tax that funds it is limited to the same earnings. Medicare has no earnings-linked benefit formula, so the 1.45% applies to every dollar of wages with no ceiling.
At what salary do I stop paying Social Security tax in 2027?
At $192,300 of wages for the year. Once year-to-date pay reaches that amount, the 6.2% line on your pay stub becomes zero. Medicare withholding at 1.45% continues on all pay, and the 0.9% surtax begins above $200,000 single or $250,000 joint.
Does the 0.9% Medicare surtax have an employer match?
No. The additional Medicare tax is paid only by the employee; there is no employer counterpart. Employers must begin withholding it once wages exceed $200,000 in a calendar year, regardless of the employee's filing status, and any difference is reconciled on Form 8959.
Do self-employed people pay both taxes on the same base?
Yes, with one adjustment. Both the 12.4% Social Security rate and the 2.9% Medicare rate apply to 92.35% of net earnings. Only the Social Security part is capped, at $192,300 of that base. Half of the combined tax is deductible.