Medicare Levy Surcharge Calculator

Higher-income earners can avoid paying the MLS simply by taking out private hospital cover. If you earn over $101,000 as a single or $202,000 as a couple or family, then taking out any hospital policy with an excess of $750 or less ($1,500 or less for couples or families) will mean you don’t have to pay the MLS. Keep in mind, only hospital cover – not extras-only or ambulance cover – will help you avoid the MLS.

If you earn under the threshold, you won’t need to pay the MLS regardless of whether or not you hold private hospital cover. But remember, there are plenty of other benefits to having private health insurance!

Not necessarily. If your income for MLS purposes is over $101,000 as a single or $202,000 as a couple or family, then holding eligible private hospital cover will mean you’ll avoid paying the additional MLS tax. But if you earn under this amount, then having health insurance won’t make any difference to how much tax you pay.

If you’re a higher-income earner, then taking out hospital before 30 June means you’ll avoid paying the MLS next financial year. You need to hold private hospital cover for the whole year to avoid paying the MLS entirely. And remember, extras-only or ambulance cover won’t cut it.

If you take out hospital cover partway through the year, then come tax time you’ll still need to pay the MLS surcharge for the part of the year you were without hospital cover. For example, if you take out hospital cover on 30 June, you’ll only avoid paying the MLS for one day of the current financial year. However, assuming you hold on to it, you won’t have to pay it at all for the following financial year.

Only eligible private hospital cover will help you avoid the MLS. If you’re a higher-income earner and only have an extras policy or ambulance cover, you’ll still pay the MLS.

As long as you have approved hospital cover, it doesn’t matter what tier or level you have. As long as it has an excess of $750 or less (or $1,500 or less for couples/families), then holding any hospital policy – basic, bronze, silver, or gold – means you’ll avoid the MLS.

The Medicare Levy and the MLS are related, but very different. Both help fund Medicare and Australia’s public health system. But while the Medicare Levy is paid by everyone, the MLS isn’t.

The Medicare Levy is a 2% tax paid by all Australian taxpayers to fund Medicare. The MLS, on the other hand, is an additional tax (1–1.5%) paid by Australians earning over a certain amount who don’t have eligible private hospital cover. It’s designed to encourage higher-income earners to take out private cover and reduce the burden on our public health system.