Medicare Levy Calculator
Calculate your 2% Medicare levy and check if you are eligible for a reduction or exemption based on your income.
Quick Use Samples
Your Situation
Medicare Levy Estimate
With a taxable income of $80,000.00, you are required to pay the full Medicare Levy of 2%, which amounts to $1,600.00 for the year.
Your estimated annual Medicare Levy is:
$1,600.00
You pay the full Medicare levy of 2%.
Income Breakdown
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What is the Medicare Levy?
The Medicare levy is a compulsory contribution that most Australian taxpayers make to help fund the public healthcare system. It is collected along with your income tax and is currently set at 2% of your taxable income.
Behind the Formula
The calculator applies the standard 2% levy to your taxable income. It also incorporates the thresholds for levy reduction or exemption. If your income is below a certain level, you may pay a reduced rate or no levy at all. The calculator applies these rules to determine your final levy amount.
Expert Insights
- The Medicare Levy is separate from the Medicare Levy Surcharge (MLS). The MLS is an additional tax of 1% to 1.5% for high-income earners who do not have an appropriate level of private hospital insurance.
- Some individuals are exempt from the Medicare levy, such as those with certain medical conditions, foreign residents, and those not entitled to Medicare benefits. You need to apply for an exemption certificate from Services Australia.
- The family income threshold for the levy reduction is increased for each dependent child you have, providing more relief for families on lower incomes.
Actionable Tips
- If you are a high-income earner, take out an appropriate level of private hospital cover for you and all your dependents to avoid paying the Medicare Levy Surcharge.
- Check if you are eligible for a reduction or exemption, especially if you are on a low income or have a specific medical status. This can save you hundreds of dollars.
- When budgeting, remember to factor in the 2% levy on top of your income tax. It's a significant component of your total tax liability.
Real-World Examples
A standard taxpayer
Someone with a taxable income of $80,000 will pay a Medicare levy of $1,600 (2% of $80,000) for the year.
A low-income individual
If an individual's taxable income is below the exemption threshold (e.g., $24,276 for singles in 2022-23), they do not have to pay any Medicare levy.
A high-income earner without private health insurance
An individual earning $150,000 without private hospital cover will pay the 2% Medicare levy ($3,000) PLUS the 1.5% Medicare Levy Surcharge ($2,250), for a total of $5,250.
Glossary of Terms
Medicare
Australia's universal public health insurance scheme, providing access to a wide range of health and hospital services at low or no cost.
Medicare Levy Surcharge (MLS)
An additional levy paid by high-income earners who do not have private hospital insurance. It is designed to encourage people to take out private cover and reduce demand on the public system.
Taxable Income
Your gross income minus any allowable deductions. The Medicare levy is calculated based on this figure.