Medicare Levy Surcharge

Who has to pay the surcharge?

If you don’t have an appropriate level of private hospital cover and earn above $97,000 a year as a single or above $194,000 a year as a couple, family, or single parent, you may have to pay the MLS.

How much is the Medicare Levy Surcharge?

The surcharge rate increases with your taxable income, as the table below shows.

Source: www.ato.gov.au. Accurate as at 1 July 2024

*Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

How do I avoid paying the Medicare Levy Surcharge?

If your income is less than $97,000 (singles) or $194,000 (couples, families and single parents), then you won’t need to pay the MLS at all.

If your income is above the threshold, you can avoid paying the MLS by taking out a private health insurance policy that includes Hospital cover. The excess on your Hospital cover needs to be $750 or less for singles, or $1,500 or less for couples, families and single parents. It's important to note that Extras only cover does not help you avoid the MLS, you must hold private hospital cover.

When do you have to pay the Medicare Levy Surcharge?

If you do need to pay the MLS, you will generally need to pay it when you lodge your tax return for the relevant financial year. This means you'll usually pay it during the tax season, which runs from July 1st to October 31st. The Australian Taxation Office (ATO) will calculate your MLS liability based on your income and private health insurance status declared in your tax return. You can pay your tax liability, including the MLS, through various methods such as online via myGov or through a tax agent. Please visit the Government website for more information on paying the MLS.

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The content in this article is general only and is not intended to provide, and should not be relied on for, tax or accounting advice. Before making a decision, you should obtain your own current tax and accounting advice relevant to your particular circumstances.