At what total percentage is an individual's Medicare taxed?

Prepare for the Tennessee Business and Law Exam. Study using flashcards and multiple-choice questions with explanations and hints. Ace your exam!

An individual's Medicare tax rate is set at a total of 2.9%. This rate comprises two components: 1.45% for the employee portion and an additional 1.45% for the employer portion. Therefore, when calculating the total tax contribution, both the employee and employer contributions add up to the 2.9% total.

Furthermore, it is essential to note that high-income earners may be subject to an additional 0.9% Medicare surtax on wages exceeding a certain threshold. However, this surtax does not apply to all individuals and is a separate consideration from the standard Medicare tax rate.

Understanding this structure helps explain the total of 2.9% as the correct answer, as it reflects the standard Medicare tax without additional conditions or variations.

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