Medicare Levy

The Medicare Levy is a tax payable by Australian residents to help fund some of the costs of Australia’s public health system known as Medicare. It is payable on taxable income, in addition to income tax. Individuals and families on higher incomes who do not have an appropriate level of private hospital cover may have to pay the Medicare levy surcharge.

Medicare Levy is usually calculated at 2% of taxable income. You can get a reduction or exemption from paying the Medicare levy, depending on you and your spouse’s income and circumstances. You need to consider your eligibility for a reduction or an exemption separately.

Your Medicare levy is calculated when you lodge your income tax return. Generally, the pay as you go amount your employer withholds from your salary or wages includes an amount to cover the Medicare levy.

A Medicare Levy Calculator is available on the Australian Taxation Office (ATO) website to help you work out your obligation.