How to set up Additional Medicare Thresholds

Employees exceeded the $200,000 gross earnings threshold for Medicare withholdings but did not have the additional  .9% on top of the 1.45% taken.

• Payroll
• Deduction and Benefit Master
• Medicare Thresholds

In Deduction and Benefit Mater, Additional Medicare Threshold was not assigned to Medicare Deduction

1. Human Resources/Payroll > Payroll > Payroll Setup > Deduction and Benefit Master
2. Ensure that the Calc Code is 03 – Percent from Deduction Master, which is the calculation code required for Medicare deductions.
3. Click Update. Click the yellow folder button next to the Calc Code field.
   1. The program displays the Assign Additional Medicare Thresholds and Percent screen
4. Click Update.
   a. In the From Gross Amt box, enter 200,000.00, which is the lower limit for the additional tax. No additional tax is withheld until this threshold is crossed.
   b. In the To Gross Amt box, enter 999,999,999.99, which is the maximum value allowed in this field.
   c. In the Percent box, enter 0.90. This is the percentage that will be added to the Medicare amount calculated using the base percent on the deduction.
5. Click Accept
6. Click Back.
7. Click Accept to save the deduction.

Can also see HCM-Payroll Medicare Deduction Setup with Additional Tax for gross over $200k

When an employee reaches the 200k gross limit, the system will automatically take an additional .9% from the employee only (not employer). So the employee will have a total of 2.35% taken.