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.
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 MLS when he pays tax.
For more information about the MLS and how it could apply to you and any of your dependants, visit the Australian Taxation Office.
~Income for MLS purposes.
*For families, the income thresholds increase by $1,500 for each MLS dependent child after the first. Please note the threshold information above is a general guide only and may vary according to your particular circumstances.
^Taxable income + fringe benefits. No net investment losses.