What Are Medicare Wages And Tips On A Tax Form?

[SamSon]

What Are Medicare Wages And Tips On A Tax Form? I Noticed This Term On Payroll Documents And Want To Understand What It Includes. How Are They Calculated? Also, Do They Differ From Social Security Wages?

 

[Sanji]

“Medicare wages and tips” on your tax form (usually Box 5 on a W-2) is the total income you earned that’s subject to Medicare tax, which includes your regular wages, bonuses, and reported tips, and it’s often a bit higher than your Social Security wages because there’s no income cap for Medicare tax. For example, I noticed mine was higher when I had extra bonuses during the year, which is normal.

 

[samuel]

That's the total amount of your income that's subject to Medicare tax, you'll see it in Box 5 on your W-2 and it's usually a bit higher than Social Security wages because there's no income cap for Medicare.