What is the Medicare Levy and how much is it in Australia?

The Medicare Levy is a contribution most Australian taxpayers make to help fund the public health system (Medicare). It is usually 2% of your taxable income. It is calculated in addition to your basic income tax. If your taxable income is below a certain threshold ($26,000 for individuals in 2023-24, though thresholds usually adjust yearly), you may pay a reduced levy or no levy at all. There is a 'phase-in' range where the levy increases from 0% to 2% (typically between ~$26,000 and ~$32,500). Separately, there is the **Medicare Levy Surcharge (MLS)**. This is an extra 1% to 1.5% charge for higher earners who do not have an appropriate level of private hospital insurance. This is designed to encourage people to use the private system.

• Standard rate is 2% of taxable income
• Paid on top of regular income tax
• Low-income earners may be exempt or pay a reduced rate
• Medicare Levy Surcharge (MLS) is different (for those without private health)
• Calculated automatically in your annual tax return