What is the Medicare Levy Surcharge?

The Medicare Levy Surcharge (MLS) is an additional tax that applies to Australian residents who earn above a certain income threshold and do not have an appropriate level of private hospital insurance. Here are the key points:

1. Purpose: The MLS is designed to encourage individuals to take out private health insurance, thereby reducing the burden on the public healthcare system (Medicare).

2. Income Thresholds: The surcharge applies to individuals and families whose income exceeds specified thresholds. These thresholds may change annually, so it's important to check the current rates.

3. Surcharge Rates: The MLS is calculated as a percentage of the income above the threshold, with rates typically ranging from 1% to 1.5%, depending on the level of income.

4. Private Health Insurance Requirement: To avoid the MLS, individuals must have an appropriate level of private hospital insurance, which generally means a policy that covers private hospital treatment.

5. Assessment: The MLS is assessed when individuals file their annual income tax return, and it is combined with the standard Medicare Levy (which is usually 2% of taxable income).

6. Payment: Payment of Medicare Levy Surcharge is made with your annual tax return. The amount payable depends on family´s taxable income.

At YS Accounting we can provide you with professional advise about your Medicare Lavy Surcharge, please feel free to schedule an appointment with us on our website at www.taxbne.com.au/.