What is the Medicare Levy?
The Medicare Levy is a 2% levy on most Australians' taxable income, helping fund Medicare our public healthcare system.
- Who pays it? Most taxpayers earning above a certain threshold.
- Exemptions? Low-income earners and certain medical conditions may qualify for reductions or exemptions.
What is the Medicare Levy Surcharge (MLS)?
The Medicare Levy Surcharge is an additional levy on top of Medicare Levy for higher-income earners. It applies if you earn over $93,000 a year (or $186,000 as a couple or family) who don’t have complying private health insurance.
- How much? It ranges from 1% to 1.5% depending on your taxable income for surcharges.
- Why? To encourage high earners to take out private health insurance and reduce pressure on the public system.
Key Differences in a Nutshell:
- Medicare Levy: 2% of taxable income for most Australians.
- Medicare Levy Surcharge: additional 1% to 1.5% for high-income earners without private health insurance.
Avoid the Surcharge!
High-income earners can avoid the MLS by taking out private health insurance a smart move to both reduce your tax burden and improve your healthcare coverage! Private Health insurance can only remove Medicare Levy Surcharge, you still need to pay Medicare Levy!
Take Note:
1. Medical Levy Surcharge (MLS) is a separate levy to the Medicare Levy. Depending on your personal circumstances, you may need to pay the MLS in addition to the Medicare levy.
2. When do you have to pay the Medicare levy surcharge?
You may have to pay the Medicare levy surcharge (MLS) if:
- 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.
