Medicare levy
What is the Medicare levy?
The Medicare levy is an amount you pay in addition to the tax you pay on your taxable income.
The Medicare levy helps fund some of the costs of Australia’s public health system known as Medicare. The Medicare levy is 2% of your taxable income.
Want to find out how to calculate your medicare levy?
Use this calculator
Medicare levy calculator | Australian Taxation Office
Exemptions to medicare levy explained.
Medicare levy exemption | Australian Taxation Office (ato.gov.au)
Reductions to medicare levy for low incomes.
Medicare levy reduction | Australian Taxation Office (ato.gov.au)
When you pay the Medicare levy surcharge
If you have to pay the Medicare levy, you may have to pay the Medicare levy surcharge (MLS) if both:
- you, your spouse and your dependent children do not have an appropriate level of private patient hospital cover
- you earn above a certain income.
The MLS is an amount you pay on top of the Medicare levy.
If you’ve paid the MLS and you want to avoid paying it in the future, you can take out the appropriate level of private patient hospital cover for yourself, your spouse and all your dependants.
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single threshold |
$93,000 or less |
$93,001 – $108,000 |
$108,001 – $144,000 |
$144,001 or more |
| Family threshold |
$186,000 or less |
$186,001 – $216,000 |
$216,001 – $288,000 |
$288,001 or more |
| Medicare levy surcharge |
0% |
1% |
1.25% |
1.5% |
The private health insurance statement you receive from your insurer includes information that relates to the Medicare levy surcharge (MLS).
It will include the number of days that your policy provided the appropriate level of private health hospital cover, as shown below.
| Number of days this policy provides an appropriate level of private patient hospital cover | A |
365 |
|---|
A Medicare levy surcharge may apply if you, your spouse and all your dependants didn’t maintain an appropriate level of private patient hospital cover for the full income year. Use the number of days listed at A to help you complete the Medicare levy surcharge question on your tax return.
We will work out if you have to pay the MLS based on the information you provide in your tax return. We will include MLS with your Medicare levy. It will show as one amount on your notice of assessment, called Medicare levy and surcharge.
Book in for tax return