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Medicare payroll tax increased by 0.9% on high-income earners

The Medicare payroll tax will increase by 0.9% for individuals making more than $200,000 and married couples making more than $250,000. Under current law, the Medicare payroll tax is 2.9% on all wages, with the wage earner and the employer each paying 1.45%. As a result of the ACA, the worker’s share of the Medicare tax (but not the employer’s share) will increase by 0.9% to a total of 2.35% of total wages beginning in 2013. The 0.9% increase in the Medicare tax will only apply to wages that exceed $200,000 (for singles) or $250,000 (for married couples filing jointly).