What is the FICA percentage for Medicare?

The correct answer is 2.9%. This percentage represents the Federal Insurance Contributions Act (FICA) tax that is specifically designated for Medicare, which provides health insurance for individuals aged 65 and older and certain younger individuals with disabilities.

The FICA tax for Medicare is composed of a standard rate of 1.45% for employees and an additional 0.9% for higher-income earners, resulting in a total of 2.9% for those individuals. It's important to understand that, unlike Social Security contributions, there is no wage base limit for the Medicare portion of the FICA tax; therefore, all earned income is subject to this tax rate.

This knowledge is crucial for plumbing professionals and other workers who need to understand their payroll deductions, as well as for those who might be involved in payroll processing or accounting in their respective fields. Recognizing the correct percentage helps ensure compliance with federal tax regulations and financial planning for one’s own or employees' contributions towards Medicare benefits.