The Medicare Levy Surcharge (MLS) is an additional tax which Australians need to pay if they are without private health insurance hospital cover and have an annual taxable income over $97,000 as a single or $194,000 as a couple/family.
If you do not hold an eligible hospital cover (or if you drop your hospital cover) you will have to pay additional tax on top of the standard Medicare Levy that applies to all Australian taxpayers.
The amount that you pay is based on income tiers. Effective from 1 July 2024, the MLS income tiers are as follows:
- Tier 1 – A 1% Medicare Levy Surcharge will be paid by people with a taxable income ≥ $97,000 as a single or $194,000 as a family
- Tier 2 – A levy of 1.25% will apply to people with a taxable income ≥ $113,000 as a single or $226,000 as a family
- Tier 3 – A levy of 1.5% will apply to people with a taxable income ≥ $151,000 as a single or $302,000 as a family
MLS income thresholds effective from 1 July 2024
| Base Tier | Tier 1 | Tier 2 | Tier 3 | |
|---|---|---|---|---|
| Singles | $97,000 or less | $97,001-$113,000 | $113,001-$151,000 | $151,001 or more |
| Couples / Families | $194,000 or less | $194,001-$226,000 | $226,001-$302,000 | $302,001 or more |
Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.
The MLS income thresholds for the period 1 July 2023 to 30 June 2024 were based on the following table.
MLS income thresholds | 1 July 2023 to 30 June 2024
| Base Tier | Tier 1 | Tier 2 | Tier 3 | |
|---|---|---|---|---|
| Singles | $93,000 or less | $93,001-$108,000 | $108,001-$144,000 | $144,001 or more |
| Couples / Families | $186,000 or less | $186,001-$216,000 | $216,001-$288,000 | $288,001 or more |
Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.
How to avoid the Medicare Levy Surcharge
You can avoid the MLS by keeping your hospital cover or adding a hospital cover to your policy. You’ll only be exempt from the MLS for the period during which you held this level of hospital cover. If you decide to leave and come back to private health insurance later, waiting periods and Lifetime Health Cover (LHC) loading may apply.
Please note Extras cover (general treatment) alone will not provide an exemption; it must be packaged with an eligible hospital cover.
Travel insurance products, hospital cover with an excess above $750 for singles or $1500 for couples and families, or from overseas insurers, are not exempt from the MLS. All GMHBA hospital covers are complying health insurance products (CHIP) and eligible for the MLS exemption.
More information
To find out more about the Medicare Levy Surcharge and the potential tax benefits of holding an appropriate level of private health insurance hospital cover:
- visit ato.gov.au/privatehealthinsurance
- visit health.gov.au/privatehealth, or
- consult your tax adviser.
You can also call GMHBA on 1300 446 422.