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Medicare levy surcharge impacts top earners

Medicare Levy Surcharge

The Medicare levy surcharge increased from July 1, 2012 following two bills being passed in the lower house of Federal Parliament.


What is the Medicare levy surcharge?

The Medicare levy surcharge (MLS) is charged to taxpayers who earn a certain income but do not have an ‘appropriate’ level of private hospital insurance. 

The levy was introduced to encourage high earners to take out private hospital cover. Ultimately the aim was to reduce pressure on the public health care and hospital system.


How is the surcharge worked out?

The ATO use a base income threshold to determine whether you must pay the MLS. Keep in mind, the surcharge is paid as well as the Medicare levy.


What is the base income threshold?

If you earn less than $90,000 as a single and $180,000 for families, you will not be charged the MLS.

There are special conditions that exclude some people from paying. Drop us a line at CVW Accounting if you have questions about the surcharge.


If you earn more than the threshold, what does that mean?

If you have to pay the surcharge, it will be included on your annual notice of assessment from Medicare.

The MLS and the Medicare levy will be displayed as one amount on your notice of assessment. It will be called Medicare levy and surcharge.


What the surcharge increase means for you?

The MLC currently sits at 1.5 per cent of taxable income for top earners without private health insurance cover.


If you have questions about your specific circumstance in relation to the surcharge, contact the CVW Accounting team or visit the ATO.

First published March 2012. Reviewed and updated October 2018, January 2020 and May 2021.

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