Medicare Levy vs. Medicare Levy Surcharge

Medicare Levy

Medicare levy is a 2% tax imposed on all Australians to help fund the cost of Medicare with some exceptions.

If you are single and earn less than a certain income threshold ($22,801 for the tax year 2019-2020), you don’t have to pay the Medicare levy. If you are single and earn between $22,801 and $28,501, your Medicare levy is at a reduced rate.

Families with combined income lower than $48,093 (add $4,416 for each dependent) will qualify for a Medicare levy reduction.

Medicare Levy Surcharge

Medicare Levy Surcharge (MLS) is an additional 1% to 1.5% tax charged for people earning income above $27,069 and do not have an appropriate level of private hospital cover. It’s a penalty for not taking out private hospital cover which adds strain on the Medicare and public hospital system especially for those who can’t afford to access private health care.

The exact rate applicable to you depends on your income level.

Income Thresholds for Singles<$90,000$90,001 – $105,000$105,001 – $140,000>$140,001
Income Thresholds for Families<$180,000$180,001 – $210,000$210,001 – $280,000>$280,001
MLS Rates0.0%1.0%1.25%1.5%

You must have a sufficient level of private health coverage for the entire household. Sufficient coverage means that each member of your household holds a minimum Basic tier hospital cover with a maximum excess of $750 for singles and $1,500 for couples/families.

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