Tax Facts - Medicare Levy

Medicare gives Australian residents access to health care. It is partly funded by taxpayers.

The Medicare Levy is a tax Australian residents pay to cover health care charges. It is payable on taxable income, in addition to income tax. Medicare Levy is usually calculated at 2% of taxable income. A reduction in the rate is available for people on low incomes and an exemption is available for people in certain categories. If you don’t have private hospital health insurance, you may have to pay the Medicare levy surcharge (MLS) in addition to the Medicare levy. This depends on your income for MLS purposes. Individuals and families on higher incomes who do not have an appropriate level of private hospital cover may have to pay the Medicare levy surcharge (MLS). If you do have an appropriate level of private hospital health insurance, you won't have to pay the MLS, and depending on your income you may be eligible for the private health insurance rebate. This rebate is an amount the government contributes towards the cost of your private hospital health insurance premiums.

A Medicare Levy Calculator is available on the Australian Taxation Office (ATO) web site to help you work out your obligation.

The Medicare levy and MLS and any reductions are calculated from information provided in your tax return. Depending on your circumstances, the Medicare levy, the MLS or variations to your private health insurance rebate may impact on the refund you receive or the tax you owe.