Medicare Levy Surcharge (MLS)

The Medicare Levy Surcharge applies to Australian taxpayers who do not have private hospital cover and who earn above a certain income ($90,000 per year for singles and $180,000 for families in the 2019/20 financial year). The surcharge aims to encourage individuals to take out private hospital cover and, where possible, to use the private system to reduce the demand on the public system.

The surcharge is calculated between 1% and 1.5%, dependent on your household income. It is in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers. The Medicare Levy Surcharge is imposed on individuals earning over the income threshold who do not have an appropriate level of hospital cover. The income threshold changes each financial year. You do not have to pay the surcharge if your household income is below the income threshold.

The RBHS hospital cover exempts you from the Medicare Levy Surcharge.

 

 

Step 1: Income Threshold
(for 2020/21 financial year)

Medicare Levy Surcharge
(This will only apply if you don't have private hospital cover)
Base Tier

Single
$90,000 or less
Family*
$180,000 or less

0%
Tier 1

Single
$90,001 - 105,000
Family*
$180,001 - 210,000

1%
Tier 2

Single
$105,001 - 140,000
Family*
$210,001 - 280,000

1.25%
Tier 3

Single
$140,001 or more
Family*
$280,001 or more

1.5%

*If you're a family with children, the income threshold for each tier is increased by $1,500 for every child after your first.

Family includes couples and single parent families.