Medicare Levy vs. Surcharge | 2023 Gotax

Medicare Levy vs. Surcharge what sucks

From the get-go every reader needs to understand that you will pay Medicare every time you get your weekly pay cheque. It's a simple 2% tax of your total taxable income, so if you earn $50,000 for the year, your contribution to Austrla's medical fund will be 2% of $50,000, which is $1000.  So when you need surgery, in you go and get fixed up.  Unlike the taxing system that wants your tax "today" you can sometimes wait months or even years to get treated.  So if you're looking for bang for your bucks, medicare isn't a good example.

Now understand the Medicare Levy and the Medicare Levy Surcharge are two different systems.  The more you earn the great chance of have of being inflicted with the Medicare Levy Surcharge.

The Medicare Levy Surcharge is an additional tax for certain groups of people that do not have private health insurance. The aim of the surcharge is to encourage higher income earners to use the private hospital system in a bid to reduce demand on the public system. The Medicare Levy Surcharge is calculated at a rate of 1%, 1.25% or 1.5% against your taxable income, total reportable fringe benefits and any amount on which family trust distribution tax has been paid.

Here are the Medicare Levy Surcharge (MLS) income thresholds and rates for 2023–24:

The family income threshold is increased by $1,500 for each MLS dependent child after the first child.

To avoid paying the Medicare Levy Surcharge, you can take out private hospital cover before the first of July. It’s important to note that simply signing up for a cheap private healthcare plan with minimal coverage may not be enough to avoid paying the MLS. You should carefully consider your options and choose an appropriate level of private hospital cover to avoid paying the surcharge.