What is the Medicare Levy?

The Medicare Levy, typically calculated at 2% of your taxable income, is the amount paid by Australian taxpayers that partially funds Medicare access for residents. It is reduced accordingly when your taxable income falls below a certain threshold. In some cases, you are exempt from paying the Medicare levy at all.

 

In the 2017-2018 financial year you are: 
  • Not required to pay the Medicare levy if your taxable income is less than or equal to $21,980 ($34, 758 for seniors and pensioners)
  • Required to pay only part of the Medicare levy if your taxable income is between $21,980 and $27,475 ($34,758 and $43,447 for seniors and pensioners)
  • Must pay the full Medicare levy amount if your taxable income is above $26,668 ($42,172 for seniors and pensioners)

If your taxable income is more than $27,476 ($43,448 for seniors and pensioners), you could still qualify for a Medicare levy reduction. This is dependent on your family taxable income, which consists of:

  • The combined taxable income of you and your spouse, OR
  • Your taxable income if you were a sole parent for the year

What is the Medicare Levy Exemption?

Every Australian resident has to pay a Medicare levy that amounts to 2% of their taxable income. However, it is possible to qualify for a reduction or exemption.

 

Nonresidents

First of all, if you are a nonresident for tax purposes, you do not need to pay the Medicare levy.

 

Residents

If you are an Australian resident, you may be able to pay a reduced Medicare levy if your income is between $21,980 and $27,475. Slightly higher thresholds apply to taxpayers who qualify for the senior Australians tax offset and the pensioner tax offset if your income if between $34,758 and $43,447.

 

If your taxable income is equal to or less than the lower threshold amount ($21,980) you may be exempt from the Medicare levy entirely.

 

 

What is the Medicare Levy Exemption?

Medicare Levy Exemption

 

First of all, if you are a nonresident for tax purposes, you do not need to pay the Medicare Levy. Every Australian resident has to pay a Medicare Levy that amounts to 1.5% of their taxable income. However, it is possible to qualify for a reduction or exemption.

 

If you are an Australian resident, you may be able to pay a reduced Medicare Levy. Your income must be between $21,665 and $27,068. Slightly higher thresholds apply to taxpayers who qualify for the senior Australians tax offset and the pensioner tax offset. Your income must be between $34,244 and $42,805. On the other hand, if your taxable income is equal to or less than the lower threshold amount ($21,665) you may be exempt from the Medicare Levy entirely.