Medicare Levy Surcharge
Medicare Levy Surcharge
The Medicare Levy Surcharge (MLS) is a fee placed on Australian taxpayers who do not have an appropriate level of private hospital insurance and who earn above a certain income. The incentive behind the surcharge is to encourage individuals to take out private hospital cover and to use the private hospital system to help alleviate some of the demand on the public Medicare system.
The surcharge is calculated at the rate of 1% to 1.5% of your income. It is in addition to the standard Medicare Levy of 2.0%, which is paid by most Australian taxpayers. The Medicare Levy Surcharge covers all people on your policy.
Medicare Levy Surcharge Thresholds: Refer to table at the bottom of the page.
Single parents and couples (including de facto couples) are subjected to family tiers. For families with children, the thresholds are increased by $1500 for each child after the first.
You may also be subject to the MLS, if your taxable income is over the threshold and you have a dependent who is not currently covered by an approved health cover.
If you’re an ADF serving member, you are likely exempt from paying the levy if you are single, or only pay a 1% levy if you have a family. If, as an ADF member, your family does not have an appropriate level of private health cover for the full financial year, and your combined family income is $202,001 or above, you should consider if taking out private hospital cover is right for you.
If you’re an ADF serving member, for complete information on taxation treatment, refer to Division 4: Medicare levy | Pay and Conditions.
If you’re not an ADF serving member and you or your family receive a high income, you may wish to consider taking out private health insurance to avoid the high surcharge.
For further information, please refer to the Medicare Levy Surcharge page on the Australian Taxation Office website.
Medicare Levy Surcharge information correct as of 1 July 2024.
As of 1 July 2025, the Medicare Levy Surcharge will be:
