Medicare Levy Surcharge

The Medicare Levy Surcharge is a levy payable by high income earners who do not have private hospital insurance

What is the Medicare Levy Surcharge?

The Medicare Levy Surcharge is a levy of 1% that is payable by high income earners who do not have private hospital insurance. This is in addition to the 1.5% Medicare Levy that is paid by most income earners.

How does the Medicare Levy Surcharge work?

Simply multiply your taxable income by 1%. This is the extra amount you may have to pay at tax time. For example: if you earn $120,000 per annum, you may have to pay an extra $1,200 at tax time.

Who is affected by the Medicare Levy Surcharge?

Use the following table to determine whether you will have to pay the extra 1% Medicare Levy Surcharge:

Your family status	Number of dependents	Your annual income	Your additional tax amount
Single	0	$50,000 or more	$500 or greater
Couple	0	$100,000 or more	$1,000 or greater
Family	1	$100,000 or more	$1,000 or greater
	2	$101,500 or more	$1,015 or greater
	3	$103,000 or more	$1,030 or greater
	4	$104,500 or more	$1,045 or greater
	5	$106,000 or more	$1,060 or greater
	6	$107,500 or more	$1,075 or greater
	7	$109,000 or more	$1,090 or greater
	8	$110,500 or more	$1,105 or greater
	9	$112,000 or more	$1,120 or greater
	10	$113,500 or more	$1,135 or greater
	11	$115,000 or more	$1,150 or greater

How can I avoid the Medicare Levy Surcharge?

If you have private hospital insurance, you are exempt from the Medicare Levy Surcharge, regardless of your income. You will not be able to avoid the surcharge if you take out singles cover with a yearly excess above $500 or family cover with a year excess above $1,000.

All HBA hospital cover will allow you to avoid the Medicare Levy Surcharge.

What is the Medicare Levy Surcharge?

Australians pay a 1.5% Medicare levy, which is used by the Government to fund medical care as a public or "Medicare" patient. The Medicare Levy Surcharge is an additional 1% of a person's taxable income imposed if they are on a higher income and do not have private hospital insurance coverage. It will generally be payable when a person's income tax for a year is assessed and is payable.

Who does it affect?

Single people with taxable incomes greater than $50,000 pa
Families (with or without children) with combined taxable incomes greater than the family surcharge threshold. The family surcharge threshold is $100,000 pa plus an additional $1,500pa for each additional dependent child after the first.

Examples of how this would impact on high-income earners include:

A single person without private hospital insurance earning $52,000 pa with no dependants will pay an additional 1% Medicare levy, or $520 additional tax

Levy	Calculation	Result
Medicare Levy Surcharge	1% of $52,000	$520

married couple without private hospital insurance earning a combined taxable income $150,000 pa will pay $1,500 additional tax

Levy	Calculation	Result
Medicare Levy Surcharge	1% of $150,000	$1,500

How can the Medicare Levy Surcharge be avoided?

High-income earners without private hospital cover will pay the additional 1% levy. They can choose to take out private hospital cover and avoid the extra tax. A privately insured patient enjoys choice of doctor and hospital, no waiting lists or queues for hospitalisation, private room accommodation, after care entitlements.

What is the required private hospital health cover?

You need to have cover under a health insurance policy that pays hospital fees and charges in respect of a stay in hospital. This does not include a policy that provides extras cover only. If you have dependents, the private patient hospital cover must be held for you and all your dependants to avoid liability to the surcharge.

Who are dependants for surcharge purposes?

Providing you contribute to their maintenance, your dependants for Medicare Levy Surcharge purposes are:

Your spouse
Any of your children under 16 years of age
Any of your children studying full-time and under 25 years of age

Check out our Medicare Levy Surcharge calculator to see if you are impacted

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