Confusion abounds as to what exactly the Medicare Levy Surcharge (MLS) is, so let’s clear it up once and for all.
It’s not the same as the Medicare Levy
First of all, the surcharge is not the same as the Medicare Levy. The levy is a compulsory tax that’s deducted from your annual taxable income unless you are eligible for a reduction or exemption from paying the levy. It’s equal to 2% of your income and goes towards funding our public health system, Medicare.
For more information visit the ATO website.
The MLS is a government surcharge
In addition to the Medicare Levy, the Federal Government introduced the MLS to help ease the burden on the public healthcare system. The MLS applies to Australian tax payers if they or their dependants± don’t hold an appropriate level of private hospital cover and have an income ± ± of over the MLS income threshold.
For more information about when your family member may be a "dependant" for MLS purposes, visit the Australian Taxation Office website.
±"Dependant" has a specific meaning for Medicare Levy Surcharge purposes. Visit the Australian Taxation Office website to learn more.
± ±"Income" has a specific meaning for Medicare Levy Surcharge purposes. Visit the Australian Taxation Office website to learn more.
MLS thresholds can be found on the ATO website; click here.