The Medicare Levy Surcharge (MLS) is a Federal Government initiative to encourage individuals to take out private hospital cover to reduce the demand on the public health system.
The levy is applied to all Australian tax payers who earn above a certain income and don’t have private hospital cover. The income thresholds increase incrementally, as does the MLS itself, depending on your annual household income for MLS purposes.
Don’t have hospital cover?
You may have to pay the MLS. Keep in mind that you must have hospital cover for the full financial year to avoid paying the surcharge. If you take out a hospital policy after 1 July, you’ll only avoid the MLS for the periods you held hospital cover.
Use our handy tax calculator to see how much you could save with HIF.
Annual Household Income for MLS purposes threshold
The current surcharge and income threshold levels applicable for the 2024-25 financial year (from 1 July 2024) are:
| POLICY TYPE | Annual household income for MLS purposesADJUSTED TAXABLE INCOME |
|---|
SINGLE
COUPLE/FAMILY | $97,000 or less
$194,000 or less | $97,001 - 113,000
$194,001 - 226,000 | $113,001 - 151,000
$226,001 - 302,000 | $151,001 or more
$302,001 or more |
| APPLICABLE MLS | 0% | 1.0% | 1.25% | 1.5% |
Please note: The thresholds increase annually based on growth in Average Weekly Ordinary Time Earnings.
Single parents & couples (including defacto couples) are subject to family tiers.
For families with children, the thresholds are increased by $1,500 for each child after the first.
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