60 Day Money Back Guarantee - For new members, we will refund any premiums paid as long as you haven’t made a claim.

What is the Medicare Levy Surcharge (MLS)?

Learn about the Medicare Levy Surcharge, income thresholds and how private health insurance hospital cover may help you to avoid MLS, if it applies to you.

Understanding the Medicare Levy Surcharge and hospital cover   

The Medicare Levy Surcharge is an additional levy paid by higher income earners who do not hold an appropriate level of private health insurance hospital cover. It’s designed to encourage the uptake of private health insurance hospital cover and reduce the load on the public healthcare system.

The rates and thresholds are set by the Australian Government – the higher your annual income, the more you’ll pay in MLS.

Income thresholds and rates

The tables below will help you to work out the income threshold and MLS rate that may apply to you. Income thresholds are based on your income for MLS purposes and your cover type, such as whether you're single, part of a couple, a family, or a single parent.

MLS thresholds and rates | 2023/2024 financial year

  $93,000 or less $93,001- $108,000 $108,001- $144,000 $144,001 or more
Tier Base tier Tier 1 Tier 2 Tier 3
% of income you may have to pay 0.0% 1.0% 1.25% 1.5%
MLS you may have to pay $0 $930 - $1080 $1350 - $1800 $2160 or more


Couple / Family / Single parent
  $186,000 or less $186,001- $216,000 $216,001- $288,000 $288,001 or more
Tier Base tier Tier 1 Tier 2 Tier 3
% of income you may have to pay 0.0% 1.0% 1.25% 1.5%
MLS you may have to pay $0 $1860-2160 $2700-$3600 $4320 or more

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


How it works: Families

Your family has a combined household income of $290,000 per year (2 adults, 1 dependant child). Your income places you in Tier 3 of the family income threshold, meaning you would have to pay 1.5% of your combined income as MLS. That’s $4,350 per year. To avoid MLS, you could take out a family hospital insurance policy, making sure the total policy premium is less than what you would have to pay in MLS*.

*Depending on your circumstances and where your income is placed in the relevant income tier, it’s possible that your health insurance premium could be higher than what you would be required to pay for the MLS. If that’s the case, you might not see any tax savings if you have purchased a hospital policy specifically for that purpose.

Who doesn't have to pay MLS? 

You may be exempt from paying the Medicare Levy Surcharge if you:

  • Earn a taxable income below the MLS threshold ($93,000 for singles or $186,000 for families/couples/single parents)
  • Earn a taxable income above the MLS threshold and hold private hospital cover for you/your partner and any applicable dependants for the full financial year
  • Are a prescribed person with no dependants who already has a Medicare Levy exemption, you may also be exempt from the Medicare Levy Surcharge for either a half or full financial year.

Learn more about Medicare Levy Surcharge exemptions.

Minimum health insurance to avoid MLS

Any level of hospital cover, whether it’s Basic, Bronze, Silver or Gold tier, can help you to avoid the MLS. It all depends on how you may use your cover and what level of peace of mind you’re looking for. The higher the insurance tier, the more clinical categories are included, but at a higher cost.

The lowest tier available is Basic. This level of cover can be an affordable way to benefit on tax savings if you're a higher income earner and that’s all you’re looking to use it for.

What counts as an appropriate level of private patient hospital cover to avoid MLS?

All GMHBA’s hospital covers count as an appropriate level of cover for MLS purposes.

To meet these requirements, a policy must:

  • Have an excess of $750 or less if you’re single; or
  • Have an excess of $1,500 or less if you’re a family, couple or single parent; and
  • Be provided by a registered health insurer

Having only extras or ambulance cover on its own doesn’t count as an appropriate level of private health insurance hospital cover.

Pricing covers Single, aged 30 living in VIC earning $93,000 or less, base tier government rebate. Excludes . Prices and displayed products can change if details vary.

Value hospital cover with GMHBA


Differences between Medicare Levy and Medicare Levy Surcharge

It’s easily confused, but the Medicare Levy and Medicare Levy Surcharge aren’t the same thing.

Medicare Levy Medicare Levy Surcharge 

The Medicare Levy is what most Australians pay in their tax each year. The current rate is 2% of your taxable income.

This helps to fund Australia’s public health system (Medicare).

The Medicare Levy Surcharge (MLS) is an additional levy on top of the Medicare Levy. MLS only applies if you're a higher income earner without private health insurance hospital cover.

Medicare is funded by the Medicare Levy and MLS.


How to avoid paying the Medicare Levy Surcharge

If you’re a higher income earner, you can avoid paying MLS by taking out an appropriate level of private health insurance hospital cover for the full financial year. All of GMHBA’s hospital covers meet these requirements.

If you have hospital cover for less than a full financial year you still may need to pay some MLS for days that you didn’t have cover. This is called a partial exemption from MLS.

If you’re unsure if or how MLS may impact you at tax time, it’s worth checking with a tax professional who can provide personalised advice based on your personal circumstances.

Calculating Medicare Levy Surcharge

Here's some simple steps to calculate your MLS amount. It only takes a few minutes to see if you could save by joining one of GMHBA’s hospital covers:

  1. Get a quote for hospital cover. A lower level of hospital cover allows higher income earners to minimise tax without paying a high premium (but there won’t be as many services included).
  2. Use the Medicare Levy Surcharge income calculator to work out your annual income for MLS purposes
  3. Deduct the hospital premium from your MLS estimate
  4. The number on your screen (or in your head if you’re good at that sort of thing) is your tax savings, if you were to purchase a hospital policy.

It may be a lot, or just a little, but any money saved still counts as a win!

Is private health insurance worth it?

Having private hospital cover in Australia can offer advantages such as avoiding public hospital waiting lists, faster access to specialist healthcare services, and may be financially beneficial by helping to avoid the Medicare Levy Surcharge (if you’re a higher income earner and it applies to you).

Benefits of private hospital cover

Private patient

With private hospital cover, you have the option of being treated as a private patient, often within a private hospital.

Your choice of doctor

Hospital cover gives you the option to choose your own doctor or specialist, so you can make the call about who treats you.

Peace of mind

Knowing you may be able to avoid public hospital waiting lists can be a comfort when life throws a curveball.


The Medicare Levy Surcharge is calculated based on your income for MLS purposes. If you do have to pay the MLS, the amount is based on tiers ranging from 1% to 1.5% of your earnings.

Yes, even if only one person earns above the income thresholds, the couple would be required to pay the Medicare Levy Surcharge. You would be assessed as a combined family income.

If you had a spouse or dependants for any part of the financial year, you would be counted as a couple or family.

If you only had a spouse for part of the financial year, it can start to get a bit complicated, so it might be best to check in with a tax professional.

You could be required to pay MLS if you've suspended your membership, as you wouldn’t have held an appropriate level of hospital cover during the suspension period.

You would see this as ‘days without cover’ on your private health insurance tax statement.

LHC is a loading on private health insurance hospital policy premiums for every year you didn’t have hospital cover after you turned 30. The Australian Government introduced the Lifetime Health Cover loading to encourage people to take out private hospital insurance earlier in life and stay covered.

To avoid LHC loading, you need to have hospital cover by 1 July after your 31st birthday. If you join after this time, a 2% loading is added to your premium for each year after you turned 30 that you didn't have hospital cover. Any loading applied will remain for 10 years of continuous cover before it's removed and your premium returns to standard.

Worth knowing:

  • The rebate doesn’t apply to the LHC portion of your premium
  • LHC loading isn’t related to your income level or to the Medicare Levy / Medicare Levy Surcharge, but it can affect the final premium you pay
  • Extras cover by itself won’t help avoid LHC, you must have hospital cover.


Need some help?

Can't find what you are looking for? Visit our help page or contact our friendly customer service team.