Who needs to know about it?
Anyone earning more than $93,000 a year as a single or $186,000 as a couple or family (income thresholds as of 1 July 2023).
What is it?
The Medicare Levy Surcharge was created to take the pressure off the public health system by encouraging higher-earning Aussies to take out private hospital cover.
You may not realise that most of us pay a Medicare Levy through our income tax.
This levy helps to fund the public health system and pay for the health services we use and claim through Medicare.
If you earn over a certain amount, and don’t have private hospital cover, you’ll have to pay an additional amount. That’s the MLS.
If you earn more than $93,000 as a single and $186,000 as a family, you may be charged an additional amount – calculated in your annual tax return. There are special rules to determine your income for this calculation – it is not the same as your taxable income. The MLS can be up to 1.5% of your income, payable at tax time.
You can also check out the ATO website for more information, including who is considered a dependant for MLS purposes.
There are a lot of specific rules that might impact your personal situation and we recommend you check the ATO website carefully to determine your own situation.
To work out your annual income for MLS and Rebate purposes, you can refer to the Australian Taxation Office's Private Health Insurance Rebate Calculator or contact the ATO directly.
The table below reflects the income thresholds in place from 2015–16 to 2022–23. These remained unchanged for eight years.
| |
Base tier |
Tier 1 |
Tier 2 |
Tier 3 |
| Single income |
<$90,000
|
$90,001 - $105,000 |
$105,001 - $140,000 |
>$140,001 |
| Family income |
<$180,000 |
$180,001 - $210,000 |
$210,001 - $280,000 |
>$280,001 |
| Medicare Levy Surcharge |
| All ages |
0.0% |
1.0% |
1.25% |
1.5% |
Note: 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.
The income threshlds change from 1 July 2023, outlined in the table below.
| |
Base tier |
Tier 1 |
Tier 2 |
Tier 3 |
| Single income |
<$93,000
|
$93,001 - $108,000 |
$108,001 - $144,000 |
>$144,001 |
| Family income |
<$186,000 |
$186,001 - $216,000 |
$216,001 - $288,000 |
>$288,001 |
| Medicare Levy Surcharge |
| All ages |
0.0% |
1.0% |
1.25% |
1.5% |
Note: The family income threshold is increased by $1,500 for each dependent child after the first child (dependent child is defined for MLS and also applicable for the Government Rebate).