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Medicare Levy Surcharge

Learn about the Medicare Levy Surcharge, when it applies, and how to avoid it.

What is the Medicare Levy Surcharge?  

The Medicare Levy Surcharge (MLS) is an Australian Government income based tax designed to motivate people to take out private health insurance hospital cover and not rely on the public healthcare system.

How does it work?  

If you earn over $90k as a single or $180k* as a couple/family and do not hold eligible private heath insurance hospital cover, you must pay MLS.

This is an additional tax on top of the standard Medicare Levy that applies to all Australian taxpayers.

*For single parents and families, the income threshold increases by $1,500 for each dependant child you have after your first.

How much MLS would I need to pay? 

The MLS amount you must pay is calculated by your annual taxable income at a rate of 1% to 1.5%.

The rate of surcharge is determined by the income thresholds below:

  • $90,000 as a single or $180,000 as a family - 1% Medicare Surcharge Levy
  • $105,000 as a single or $210,000 as a family - 1.25% Medicare Surcharge Levy
  • $140,000 as a single or $280,000 as a family - 1.5% Medicare Surcharge Levy

 

  No MLS 1.0% MLS 1.25% MLS 1.5% MLS
Singles $90,000 or less $90,001-$105,000 $105,001-$140,000 $140,001 or more
Couples / Families $180,000 or less $180,001-$210,000 $210,001-$280,000 $280,001 or more

How can I avoid paying MLS?

If your annual income falls within one of these thresholds, you can avoid paying MLS by taking out GMHBA private health insurance hospital cover. You’ll only be exempt for the time you've held this hospital cover.

All GMHBA hospital covers are eligible to avoid MLS, as they have an excess under $750.

Please note: For individual tax advice please consult your tax professional or the ATO website.

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