What is the Medicare Levy Surcharge Exemption?

Medicare Levy Surcharge Exemption

Every Australian resident has to pay a Medicare Levy of 2% of their taxable income. On top of this, you may also pay the Medicare Levy Surcharge (MLS), which amounts to 1%, 1.25% or 1.5% of:

  • Your taxable income
  • Your total reportable fringe benefits, and
  • Any amount on which family trust distribution has been paid

You may be exempt from the Medicare Levy Surcharge if your income was below certain levels. If your income was less than $90,000 and you were single without a dependent child or less than $180,000 in most other situations, you probably will not have to pay the MLS.

Below are the income thresholds and Medicare Levy Surcharge rates for 2014-2015, 2015-2016 and 2017-2018:

Unchanged Tier 1 Tier 2 Tier 3
Single Households $90,000 or less $90,001-$105,000 $105,001-$140,000 $140,001 or more
Family Households $180,000 or less $180,001-$210,000 $210,001-$280,000 $280,001 or more
Medicare Levy Surcharge Rate 0% 1% 1.25% 1.5%

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