The Medicare Levy & The Medicare Levy Surcharge

The Medicare Levy (MCL) and the Medicare Levy Surcharge (MLS) are two distinct components of Australia’s tax system that fund the public healthcare system. Still, they apply differently depending on your family income and circumstances. 

Medicare Levy (MCL) 

• Who pays it: Most Australian taxpayers.
• How much: Typically 2% of your taxable income.
• Purpose: Helps fund Medicare, Australia's public health system.
• Exemptions/reductions:
  • Low-income earners may be eligible for a reduction or exemption.
  • Certain people with specific medical conditions or circumstances (e.g., non-residents) may be exempt.
  • Full-time members of the ADF may be exempt.

Medicare Levy Surcharge (MLS) 

• Who pays it: Higher-income earners who don’t have an appropriate level of private hospital cover.
• How much: 1% to 1.5% of your taxable income, depending on your income level.

MLS Income thresholds (for the 2024/2025 financial year)

• Singles: $97,000 or less 
• Families: $194,000 (plus $1,500 for each dependent child after the first)

MLS Income thresholds (for the 2025/2026 financial year)

• Singles: $101,000 or less
• Families: $202,000 (plus $1,500 for each dependent child after the first)

For further information on the MLS, please visit  the ATO website at: https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates

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