Medicare Levy Surcharge (MLS)

What is it? It's a tax. It applies to singles earning over $93,000 and families earning over $186,000 annually (for the 2023–2024 financial year). The MLS encourages Australians to take up private health insurance, reducing pressure on the public Medicare system.

1. Who Pays the MLS? Singles and families earning above the income thresholds without private hospital cover.
2. Rates: The surcharge ranges from 1% to 1.5% of your taxable income, depending on how much you earn.
3. Exemptions: Certain individuals, such as foreign residents and those with qualifying medical conditions, may be exempt.

To avoid the MLS, you can purchase an eligible private health insurance policy. This not only eliminates the surcharge but also gives you peace of mind for medical needs.

FAQs

Q: Can I avoid the Medicare Levy Surcharge without private health insurance?
A: No, unless you meet specific exemption criteria such as low income or foreign residency. Learn more about exemptions on the ATO's Medicare Levy Surcharge page

Q: How is the MLS calculated?
A: The MLS is calculated as a percentage of your taxable income, reportable fringe benefits, and any superannuation contributions above the required levels.