Tax & Income
Medicare Levy
A 2% levy on taxable income that funds Medicare, plus a surcharge for higher earners without private hospital cover.
What it is
The Medicare levy helps fund Australia's public health system. It's charged at 2% of taxable income for most resident taxpayers, with a reduced rate for low-income earners. A separate Medicare Levy Surcharge (MLS) adds an extra 1–1.5% for higher-income earners who don't hold private hospital cover.
Who it applies to
Most Australian resident taxpayers pay the standard 2% levy. The MLS applies only to residents above the income threshold without private hospital cover. Foreign residents don't pay either.
Key figures
- Standard levy
- 2% of taxable income
- Low-income shade-in
- $28,011 – $35,014
- MLS threshold (singles)
- $105,000
- MLS Tier 1
- 1.0% ($105,001 – $123,000)
- MLS Tier 2
- 1.25% ($123,001 – $164,000)
- MLS Tier 3
- 1.5% ($164,001+)
Important limitations
Family MLS thresholds are higher than the singles thresholds shown here and are not covered. Specific Medicare entitlement exemptions are not covered.
Official sources
- Australian Taxation Office (ATO) - Tax rates for Australian residents, Medicare levy, and HELP repayment thresholds
Educational information only, not financial advice.
Related calculators
Want the full explanation?
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