Reply To: Why does my payroll company separate medicare and addition medicare for EE?

Hi Mary,

The reason why your company separates the regular Medicare which is 1.45% from the additional medicare rate of 0.9% is because the additional Medicare does not kick in until you hit a certain income amount. So throughout the year most folks are paying the regular medicare tax rate of 1.45% and then once they hit a certain income threshold, the calculation of the additional medicare rate of 0.9% kicks in. It’s probably easier to keep the calculations separate when calculating paychecks and I believe the additional tax has to be reported on a separate line on IRS Form 941. You can check out instructions on how to complete this form by clicking the link below: https://fitsmallbusiness.com/fica-and-form-941/

Thanks so much for reading!
Crystalynn Shelton