Why Are Medicare Taxes Taken From Your Payroll Check?


Quick Answer

Federal statute requires U.S. employers to withhold Medicare taxes from employee earnings, reports the Houston Chronicle. All American taxpayers pay Medicare taxes of 1.45 percent, with taxpayers in higher tax brackets paying an additional 0.9 percent on earnings that exceed defined thresholds, according to the Legal Information Institute.

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Full Answer

The Medicare program provides health insurance for Americans age 65 and older, explains Medicare.gov. Payroll taxes pay some of those program costs by funding the Medicare Hospital Insurance Trust Fund. In 2011, Medicare covered approximately 50 million Americans through expenditures of nearly $5.5 billion. Medicare spending accounted for more than 13 percent of federal spending in that year, FactCheck.org reports.

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