What is the Australian Medicare Levy?

The Medicare levy is the amount (2% of your taxable income) that is used to add up to the fund that will be used in Australia’s public health system which is known as Medicare. This 2% is in addition to the tax that is paid on the taxable income of individuals living in Australia. Depending on your circumstances, it might be possible for you to get an exemption or reduction in the amount of Medical Levy that you have to pay. In case you need an exemption or a reduction on the Australian Medical Levy, you need to separately consider your eligibility for this purpose.

If you wish to calculate and find out your Medicare levy, you can use the Medicare levy calculator. The Medicare levy is collected in similar ways of collecting income tax. Commonly, the payment is deducted from the wages or salary that an employee holds which also includes the amount that will be deducted to cover the Medicare levy. The actual medical levy is calculated by the Australian government during the process of lodging your income tax return.

Medicare levy surcharge

Considering that your income is higher than a certain amount and you do not have a considerable amount of private patient hospital cover, then along with the reduction of the medical levy, you will have to also pay the medical levy surcharge (MLS). However, if you already have an appropriate amount of cover for the private patient hospital (also relying upon your income), you can most probably apply for a private health insurance rebate. This rebate basically funds (a specific amount) that the government will provide you for availing private health insurance premiums.

In addition to this, if you’ve done your research, you might be aware that there is a chance that you be entitled to an exemption from Medicare levy surcharge for full or half year. This element will be highly dependent upon the information being provided by you about your tax return.

Furthermore, it depends on the circumstances, but the MLS, Medicare levy and other alterations to your private health insurance rebate may have an effect on the tax you owe or the refund that you will receive.

Medicare Levy Calculator

The Medicare levy surcharge calculator is for those who wish to calculate their Medicare levy to be prepared beforehand. The calculator will help you calculate the Medicare levy for the past 6 months, considering any entitlements to an exemption or reductions.

Information that is required for calculating the Medicare levy includes:

Yours and your spouse’s taxable income

The number of days, considering that you’re eligible for an exemption.

The Medicare levy calculator will not be able to calculate your Medicare levy in the following circumstances:

Your spouse was eligible for Pensioners and Seniors Tax Offset

You received an exempt foreign employment income.