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May 18 2011

Medicare Levy and Surcharge


Medicare Levy in Australia

Medicare Levy

A Medicare Levy, currently at 2.0% of income, is charged to Individuals.

(From 1 July 2014 the Medicare levy rose from 1.5% to 2.0%)

In a similar way to the UK “National Insurance Contributions”, the Australian system has a Medicare Levy charged to most taxpayers, to go towards the costs of the Australian Medical System.

The amount payable is however very different to the UK.

The UK rate is 11% for the employee on the amount earned between the lower and upper limits. Based on the the median weekly pay for full-time employees in the UK in April 2007 being 457 pw, the employees NI contribution works out at 39.27 or 8.6% of wage, and the employer paying 45.70, a total of 84.97 or 18.59% of the gross wage.

The Australian rate is 1.5% for people, but a slightly higher rate of 2.5% for single people earning more than $73,000 AND who choose not to take out Private Health insurance. This threshold is increased to $146,000 for a married couple.

In May 2007 the Average Full-time adult total weekly earnings was $1,134.30 per week, ($58,983 pa) meaning that a single person on this wage would pay $28.35 per week (2.5%), or $17.02 per week (1.5%) if they had a Private Medical Insurance policy.

Medicare Levy Surcharge MLS

A Medicare Levy Surcharge, currently at 1% of income, is charged to Individuals and Families, whose incomes exceed certain thresholds, AND who do not hold a qualifying private patient hospital cover.

The 2008-09 taxable income thresholds for the surcharge are:

  • $ 70,000 – single person with no dependents
  • $140,000 – Family with 1 dependent or no dependents
  • $141,500 – Family with 2 dependents
  • and an extra $1,500 for each each extra dependent.

The 2009-10 thresholds are:

  • $ 73,000 for singles.
  • $146,000 for couples and families.
  • plus $1,500 for each dependent child after the first.

A hospital cover insurance policy with an excess over $500 for singles, or $1,000 for a family, taken out after 24 May 2000, does NOT qualify for MLS purposes.

If you have a qualifying policy for part of a year, then you will be exempt from the MLS for only that same part of the year.

The above information from:






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