What does the acronym HI stand for in the context of payroll taxes?

In the context of payroll taxes, the acronym HI stands for the Medicare Tax. The Medicare Tax is a federal tax that funds the Medicare program, which provides health insurance for individuals aged 65 and older, as well as certain younger individuals with disabilities. This tax is withheld from employees' wages and is important for ensuring the sustainability of Medicare services. The HI designation specifically indicates the hospital insurance aspect of Medicare, emphasizing its role in covering inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. Understanding this term is crucial for payroll accounting as it helps in accurately calculating tax withholdings and ensuring compliance with federal tax regulations.