Medicare Levy and Medicare Levy Surcharge

The Medicare Levy is a 2% tax on your taxable income, applied to most Australian residents to support public healthcare services. Most taxpayers must pay this levy unless they qualify for an exemption or reduction.

The Medicare Levy Surcharge (MLS) is an additional tax of up to 1.5% applied to higher-income earners who do not have private health insurance. It encourages individuals to take up private cover to reduce pressure on the public system.

Who Pays the Medicare Levy and MLS?

1. Who Pays the Medicare Levy? Most Australian residents earning over a certain income threshold.
2. Exemptions: Individuals with low income or specific circumstances, such as certain medical conditions.
3. Who Pays the MLS? Singles earning over $93,000 or families earning over $186,000 annually without private health insurance.

FAQs

Q: Can I avoid paying the Medicare Levy Surcharge?
A: Yes, by purchasing an eligible private health insurance policy if your income exceeds the MLS threshold. Learn more about the thresholds on the ATO website

Q: What are the income thresholds for the Medicare Levy and MLS?
A: For the 2023–2024 financial year, singles earning over $93,000 and families earning over $186,000 may be subject to the MLS. Use our Income Tax Calculator to check how these thresholds affect your tax.