Quick Answer
MED or HI on your pay stub stands for Medicare Health Insurance tax, which is 1.45% of your gross pay. If you earn $50,000 annually, you'll pay $725 per year in Medicare tax ($27.88 per biweekly paycheck). This tax helps fund Medicare benefits for current retirees.
Best Answer
Sarah Chen, Payroll Tax Analyst
Best for anyone trying to understand the Medicare tax deduction on their pay stub
What is the MED or HI deduction on my pay stub?
MED or HI stands for Medicare Health Insurance tax, which is 1.45% of your gross wages. This is a federal payroll tax that funds Medicare, the health insurance program for Americans 65 and older, plus certain disabled individuals. Every working American pays this tax on all their earned income.
Unlike Social Security tax (which caps at $176,100 in 2026), Medicare tax applies to ALL your wages with no income limit. If you're a high earner making over $200,000 (single) or $250,000 (married filing jointly), you'll pay an additional 0.9% Medicare surtax on the excess.
Example: How much Medicare tax you pay
Let's say you earn $60,000 per year and get paid biweekly (26 paychecks):
This amount comes out of every single paycheck, regardless of how much you earn.
Medicare tax at different income levels
How Medicare tax works with Social Security
Medicare tax is part of FICA (Federal Insurance Contributions Act) taxes, along with Social Security tax. Together, they're often called "payroll taxes." Here's the breakdown:
Your employer matches these taxes dollar-for-dollar, so the total going to Social Security and Medicare is actually 15.3% of your wages (7.65% from you + 7.65% from your employer).
What your Medicare tax pays for
Your Medicare contributions today fund:
When you turn 65, you'll be eligible for Medicare benefits funded by the next generation of workers.
What you should do
Medicare tax is automatic and required — there's nothing you need to do. However, you should:
1. Verify the calculation — multiply your gross pay by 1.45% to confirm the deduction is correct
2. Keep your pay stubs — they show your Medicare tax contributions for Social Security Administration records
3. Understand your future benefits — you need 40 quarters (10 years) of work to qualify for Medicare
Use our paystub explainer tool to upload your pay stub and get a detailed breakdown of all your deductions, including Medicare tax.
Key takeaway: MED/HI is Medicare tax at 1.45% of all your wages. Unlike Social Security, there's no income cap — you pay Medicare tax on every dollar you earn.
*Sources: [IRS Publication 15](https://www.irs.gov/pub/irs-pdf/p15.pdf), [Social Security Administration Medicare Overview](https://www.ssa.gov/medicare/)*
Key Takeaway: MED/HI is Medicare tax at 1.45% of all wages with no income limit, helping fund healthcare for current retirees.
Medicare tax amounts at different income levels
| Annual Salary | Medicare Tax (1.45%) | Per Biweekly Paycheck | Additional Surtax (0.9%) |
|---|---|---|---|
| $35,000 | $507.50 | $19.52 | $0 |
| $50,000 | $725.00 | $27.88 | $0 |
| $75,000 | $1,087.50 | $41.83 | $0 |
| $100,000 | $1,450.00 | $55.77 | $0 |
| $250,000 | $3,625.00 | $139.42 | $450 (on excess over $200K) |
More Perspectives
Sarah Chen, Payroll Tax Analyst
Perfect for new workers seeing MED/HI on their first pay stub
Your first time seeing MED or HI on a pay stub?
Don't worry — this is completely normal! MED (or sometimes HI for Health Insurance) is Medicare tax, and it comes out of everyone's paycheck automatically. Think of it as a small contribution to help pay for healthcare for older Americans.
The basics: What you need to know
Medicare tax is 1.45% of whatever you earn. So if this is your first job and you're making $15 per hour working 30 hours a week:
It might seem like a lot when you're just starting out, but this money helps fund healthcare for your grandparents and other retirees.
Why you can't opt out
Unlike health insurance or 401(k) contributions, you can't choose to skip Medicare tax. It's required by federal law for all employees. This ensures that when you're older, there will be Medicare available for you too.
What this means for your budget
When planning your budget for your first apartment or car payment, remember that Medicare tax (plus Social Security tax at 6.2%) means about 7.65% of your gross pay goes to these taxes. So if you're offered a job at $40,000 per year, about $3,060 will go to Social Security and Medicare taxes.
Building toward your future
Every paycheck with Medicare tax deducted counts toward your eligibility for Medicare when you turn 65. You need 40 quarters (10 years) of paying into the system to qualify for benefits.
Key takeaway: MED/HI is a required 1.45% tax that helps fund Medicare. It's automatic, can't be opted out of, and builds toward your future healthcare benefits.
*Sources: [IRS Publication 15](https://www.irs.gov/pub/irs-pdf/p15.pdf)*
Key Takeaway: MED/HI is a required 1.45% Medicare tax that automatically comes out of every paycheck to fund healthcare for retirees.
Sources
- IRS Publication 15 — Employer's Tax Guide including Medicare tax rates
- Social Security Administration Medicare Overview — Official Medicare program information
Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.