The Medicare Levy Surcharge (MLS) is a tax applied to people who earn above $97,000 as a single and $194,000 as a single parent, couple or family and don't have an appropriate level of Hospital cover.
The MLS is designed to reduce the strain on the public system by encouraging people to go to private hospitals instead.
The simple answer is yes, most Australian taxpayers are charged the Medicare Levy. This is our contribution to supporting the public healthcare system.
However, the Medicare Levy Surcharge as the name suggests, is an additional tax of 1 - 1.5% which is applied to people over the income threshold.
The Medicare Levy Surcharge starts at 1% and increases up to 1.5% depending on your annual income. Without appropriate Hospital cover, this could result in up to $970 or more in extra tax.
Income level Singles
Income level Families
Medicare Levy Surcharge
Source: Australian Tax Office. These thresholds apply for the 2024/2025 financial year. For families, and single parent families the threshold increases by $1,500 for each dependant child after the first. There are specific rules for calculating income for Medicare Levy Surcharge purposes. For more information visit the Australian Tax Office.
If you are currently or are likely to pay the MLS, join any ING Health Insurance Hospital cover before 1 July and maintain it for the full financial year to avoid paying the MLS.
The Australian Tax Office has specific rules regarding who is covered under the Medicare Levy Surcharge and how to define your income for Medicare Levy Surcharge purposes. For information get in touch with your accountant, financial planner or visit the Australian Tax Office.
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