To help pay for the Medicare health scheme, resident taxpayers are subject to a Medicare Levy. This amount is added to your tax assessment after your income tax has been calculated.
Non-residents are not liable to pay the Medicare Levy, however, to claim an exemption you must obtain a Medicare Entitlement Statement.
How much is the Medicare Levy?
|2017-18||2.0% of taxable income|
|2016-17||2.0% of taxable income|
|2015-16||2.0% of taxable income|
|2014-15||2.0% of taxable income|
|2013-14||1.5% of taxable income|
The rate of the Medicare levy is currently 2% of your taxable income (increased from 1.5% as at 1 July 2014).
Most Australians will have to pay the Medicare levy and, generally, tax offsets do not reduce the levy amount. In some cases, you may be exempt from the Medicare Levy or eligible for a reduction based on family income.
Medicare Levy Low-Income Thresholds 2018
The Medicare Levy is not payable (or is payable at reduced rates) by individuals and families on low incomes and by certain pensioners. These low-income thresholds take into account marital status and the number of dependent children or students.
The tables below relate to the 2017-18 financial year.
Individual Medicare Low Income Thresholds 2017 – 18
|Single Taxpayer||Threshold||Phase-in limit||2% at or above|
|Eligible for SAPTO||34,758||34,759 - 43,447||43,448|
|All other taxpayers||21,980||21,981 - 27,475||27,476|
> No Levy is payable on taxable income at or below the threshold amount.
> If taxable income falls within the phase-in limit, the Levy is payable at 10% of the excess over the threshold amount.
Family Medicare Low Income Thresholds 2017 – 18
|No. of |
|Reduced Levy||2% at or above|
|Taxpayer not eligible for Seniors and Pensioners Tax Offset|
|0||37,089||37,090 - 46,361||46,362|
|1||40,495||40,496 - 50,618||50,619|
|2||43,901||43,902 - 54,876||54,877|
|3||47,307||47,308 - 59,133||59,134|
|4||50,713||50,714 - 63,391||63,392|
|5||54,119||54,120 - 67,648||67,649|
|6||57,525||57,526 - 71,906||71,907|
|Each extra child||3,406||4,257|
|Taxpayer eligible for Seniors and Pensioners Tax Offset|
|0||48,385||48,386 - 60,481||60,482|
|1||51,791||51,792 - 64,738||64,739|
|2||55,197||55,198 - 68,996||68,997|
|3||58,603||58,604 - 73,253||73,254|
|4||62,009||62,010 - 77,511||77,512|
|5||65,415||65,416 - 81,768||81,769|
|6||68,821||68,822 - 86,026||86,027|
|Each extra child||3,406||4,257|
> Family income is the combined income of the taxpayer and their spouse. No Levy is payable on taxable income at or below the threshold amount.
> The Levy shades in at 10% for every dollar where family income exceeds the threshold. There is no ‘phase-in’ limit as there is with individuals since the figures change with the number of dependents.
The Medicare Levy and Private Health Cover
Confusion often exists around the Medicare Levy for those with private health cover. Although having Private Health insurance may save you from the Medicare Levy Surcharge if you are in a high income bracket, it is irrelevant when it comes to the actual Medicare Levy itself. Regardless of Private Health cover, you are still required to pay the 2% Medicare levy.
Medicare Levy Online Calculator
The Australian Taxation Office has an online Medicare Levy Calculator. The calculator can provide an estimate of your Medicare levy, taking into account any entitlement to a reduction or exemption.
In order to use the calculator, you may need to know your taxable income, your spouse’s taxable income and if you are eligible for an exemption.