The Medicare Levy Surcharge (or MLS) is an extra 1 to 1.5% tax levied on higher income earners who don’t hold private hospital cover. The purpose of this surcharge is to encourage more Australians to take out private health insurance and ease the burden on the public health system.
The MLS is charged as a percentage of your income for the period you do not hold private hospital cover during the financial year, payable at tax time.
Health insurance income thresholds for the rebate
|Medicare Levy Surcharge – Income Thresholds|
|Singles||Under $90,000||$90,001 – $105,000||$105,001 – $140,000||$140,001+|
|Families ^||Under $180,000||$180,001 – $210,000||$210,001 – $280,000||$280,001+|
|Retrieved from Privatehealth.gov.au | Information current as of 03/04/2017
^ For families with children, thresholds increase by $1,500 for each child after the first.
Families include couples, de facto couples, and single parents.
If you earn less than $90,000 on your own (or less than $180,000 as a couple/family), you don’t have to worry about paying the MLS. If you earn above this threshold, however, keep reading.
If you’re not sure about whether you need to pay the MLS, you can use our calculator below to find out.