Medicare Levy Surcharge

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Contents

  • What is the medicare levy surcharge?
  • Medicare levy surcharge income
  • Medicare levy surcharge income thresholds and rates 2024–25
  • Medicare levy surcharge income thresholds and rates 2023–24
  • Medicare levy surcharge income thresholds and rates 2014–15 to 2022–23

What is the medicare levy surcharge?

The Medicare Levy Surcharge (MLS) is an an additional 1% to 1.5% levy on top of the Medicare Levy.

If you are liable to pay the Medicare Levy, you may have to pay the MLS if both:

  • you, your spouse and your dependent children do not have an appropriate level of private patient hospital cover
  • you earn above a certain income.

If you’ve paid the MLS and you want to avoid paying it in the future, you can take out the appropriate level of private patient hospital cover for yourself, your spouse and all your dependants.

If circumstances for yourself, your spouse or your dependent children change at any time during the year, you may become liable to pay the MLS. Changes in circumstances may relate to your:

  • income
  • spouse
  • dependants
  • private health insurance

If you travel overseas and cancel your private patient hospital cover during that time, you may be liable to pay the MLS.

Medicare levy surcharge income

Income for Medicare levy surcharge (MLS) purposes is used to work out whether you have to pay the MLS and the rate you will pay.

If you have a spouse, we will use your combined income for MLS purposes.

Your income for MLS purposes is the sum of the following items for you (and your spouse, if you have one):

Taxable income

  • include the net amount on which family trust distribution tax has been paid
  • don’t include any assessable first home super saver (FHSS) released amount for the income year under the FHSS scheme.

Reportable fringe benefits.
Total net investment losses – the sum of

Reportable super contributions – the sum of

  • reportable employer super contributions
  • deductible personal super contributions.

A spouse’s share of the net income of a trust on which the trustee must pay tax (under section 98 of the Income Tax Assessment Act 1936) and which has not been included in their taxable income.

If you had exempt foreign employment income, add it to your taxable income if your taxable income is $1 or more.

If you meet both of the following conditions, you can reduce income for MLS purposes by any taxed element of the super lump sum, other than a death benefit, that does not exceed your (or your spouse’s) low rate cap:

  • you (or your spouse) are aged from your (or their) preservation age to under 60 years old
  • you (or your spouse) received a super lump sum.

Medicare levy surcharge income thresholds and rates 2024–25

Threshold Base tier Tier 1 Tier 2 Tier 3
Single threshold $97,000 or less $97,001 – $113,000 $113,001 – $151,000 $151,001 or more
Family threshold $194,000 or less $194,001 – $226,000 $226,001 – $302,000 $302,001 or more
Medicare levy surcharge 0% 1% 1.25% 1.5%

Note: The family income threshold is increased by $1,500 for each MLS dependent child after the first child.

Medicare levy surcharge income thresholds and rates 2023–24

Threshold Base tier Tier 1 Tier 2 Tier 3
Single threshold $93,000 or less $93,001 – $108,000 $108,001 – $144,000 $144,001 or more
Family threshold $186,000 or less $186,001 – $216,000 $216,001 – $288,000 $288,001 or more
Medicare levy surcharge 0% 1% 1.25% 1.5%

Note: The family income threshold is increased by $1,500 for each MLS dependent child after the first child.

Medicare levy surcharge income thresholds and rates 2014–15 to 2022–23

Threshold Base tier Tier 1 Tier 2 Tier 3
Single threshold $90,000 or less $90,001 – $105,000 $105,001 – $140,000 $140,001 or more
Family threshold $180,000 or less $180,001 – $210,000 $210,001 – $280,000 $280,001 or more
Medicare levy surcharge 0% 1% 1.25% 1.5%

Note: The family income threshold is increased by $1,500 for each MLS dependent child after the first child.

This article is general information only and does not provide advice to address your personal circumstances. To make an informed decision you should contact an appropriately qualified professional.