Medicare Levy Surcharge

Taking out private hospital cover could save you from paying a levy called the Medicare Levy Surcharge (MLS).

From 1 July 2023, the Medicare Levy Surcharge income tier thresholds will be changing.

To encourage Australians to take out private hospital cover and relieve stress on the public system, the government imposes an additional levy on the income** of those who earn more than the income** threshold and who do not hold an appropriate level of private hospital cover for themselves and all of their dependants**. This levy is known as the Medicare Levy Surcharge (MLS).

The MLS can be anywhere from 0 to 1.5% of a person’s income**, depending on their income** bracket.

The tables below outline the income** thresholds and the MLS rates that are currently in effect.

Singles income Medicare Levy Surcharge
Up to $93,000 0.0%
$93,001 - $108,000 1.0%
$108,001 - $148,000 1.25%
$148,001 - and above 1.5%
Single parent, couple of family income Medicare Levy Surcharge
Up to $186,000 0.0%
$186,001 - $218,000 1.0%
$218,001 - $288,000 1.25%
$288,001 - and above 1.5%

For single parents, couples and families, the income** thresholds increase by $1,500 for each MLS dependant** child after the first.

The MLS applies proportionately for the period during the tax year when you and any dependants** did not hold an appropriate level of private hospital cover.

For more information about when your child or family member may be a dependant for MLS purposes, visit the Australian Taxation Office website.


For example:

Simon is 33 years old, single with no kids. He decided to take out private hospital cover half way through the 2018/2019 financial year.

His total income^ for the  2018/2019 financial year is $110,000, placing him in the income bracket for Tier 2. Seeing as he was only without the appropriate level of cover for 6 months of the year, only half of his income will attract the MLS.

$55,000 x 1.25% = $687.50 payable as the Medicare Levy Surcharge when he pays tax.

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How much extra tax could you pay without hospital cover?

Use the Medicare Levy Surcharge Calculator to estimate how much extra tax you may be paying if you or any of your dependants** do not have Hospital cover for a full tax year.#

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Things you should know

^Taxable income + fringe benefits. No net investment losses.

# Where annual income for Medicare Levy Surcharge purposes is over $93,000 as a single (or $186,000 as a couple/family/single parent).

** ‘income’ and ‘dependants’ have specific meanings for Medicare Levy Surcharge purposes. To learn more visit the Australian Taxation Office website.

Medibank Private Limited cannot advise on financial or tax matters. Any information provided to you is general in nature and does not take account of your individual circumstances. You should obtain your own independent financial advice.


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