How does the Medicare Levy Surcharge work?
The Medicare Levy Surcharge works like a tax and applies to higher income earners, if you’re an Australian resident for tax purposes. If you have a taxable income over the applicable threshold and you don’t have an appropriate level of hospital cover for yourself, your spouse/partner and all your dependants, the Medicare Levy Surcharge will add on an extra 1% to your tax bill. This is on top of the standard 1.5% Medicare Levy you already pay. The Medicare Levy Surcharge applies proportionately for the period during the financial year when an appropriate level of hospital cover was not held.
The annual taxable income thresholds for the 2009/2010 financial year are:
- $73,000 for singles
- $146,000 for couples and most families (for families, the threshold increases by $1,500 for each additional child after the first).
These thresholds will be reviewed and indexed annually by the Federal Government for each subsequent financial year.
Find out more about the proposed changes to the Medicare Levy Surcharge (MLS)
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