Understanding Medicare Contributions: What You Need to Know

The term "Medicare employee" actually refers to the contribution you make through payroll taxes to the Medicare public-benefits program. These contributions are required of all employees unless you're working in the United States on a visa or are a registered student.

Medicare

• Medicare is the nation's health-insurance program for seniors over 65 and people with disabilities.

Payment

• The Medicare program is funded by beneficiaries' paying monthly premiums and from contributions taken from workers' paychecks for the duration of their careers.

Deduction

• The contribution is automatically deducted from your paycheck each cycle and is not refundable.

Label

• The labeling of employee indicates the contribution you are responsible for paying as an employee. Your employer is responsible for matching your payment.

Amount

• A standard rate is used to calculate how much is withheld from your paycheck. As of 2008, the rate is set at 1.45 percent and is used to calculate the amount paid by you and your employer.