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The following has been obtained from the Australian Taxation Office website - it is provided for information only. For further information or to check the latest updates please visit the Australian Tax Office @ www.ato.gov.au

What is the Medicare levy?

Medicare is the scheme that gives Australian residents access to health care.

To help fund the scheme, resident taxpayers are subject to a Medicare levy.

Normally, we calculate your Medicare levy at the rate of 1.5% of your taxable income. A variation to this calculation may occur in certain circumstances.

Generally, tax offsets do not reduce your Medicare levy. However, if you have excess refundable tax offsets, we use them to reduce your tax, including your Medicare levy. For more information visit the Australian Tax Office (Private Health Insurance Rebate details)

Who has to pay the Medicare levy?

Most Australians are liable to pay the Medicare levy. The standard Medicare levy is 1.5% of your taxable income. However, this may vary according to your circumstances.

In some cases you may be exempt from the levy or it may be reduced.

To work out if you are eligible for the exemption or the reduction based on family income, read:

Medicare levy reduction for people on low incomes, and
Medicare levy exemption.

What is the Medicare levy surcharge?

Individuals and families on incomes above the Medicare levy surcharge thresholds who do not have private patient hospital cover may have to pay the Medicare levy surcharge.

This surcharge is in addition to the Medicare levy. We calculate it at the rate of 1% of your taxable income (including your total reportable fringe benefits). You will need to read Medicare Levy Surcharge to see if you have to pay the surcharge.

Taxable income

Your taxable income is usually the amount you wrote at taxable income or loss on page 3 of your tax return. For Medicare levy purposes, taxable income excludes any taxed element of a superannuation lump sum for which the tax rate is zero.

Note

If you received any exempt foreign employment income, we use a special formula to work out the amount of tax – including Medicare levy – you have to pay on your taxable income. You will not be able to work out your Medicare levy. The ATO will work it out for you.

For help applying this information to your personal situation, you can:

phone the ATO on 13 28 61
send an email enquiry to the Tax Office.