Income tests: an overview

Income for Medicare levy surcharge purposes

We use your income for surcharge purposes to work out if you have exceeded the Medicare levy surcharge threshold.

Your income for surcharge purposes includes your:

• taxable income (including the net amount on which family trust distribution tax has been paid)
• exempt foreign employment income if your taxable income is $1 or more
• reportable fringe benefits amount, as reported on the payment summary
• total net investment loss (includes both net financial investment loss and net rental property loss)
• reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions).

However, if you are aged 55 to 59 years old, you deduct any taxed element of a super lump sum, other than a death benefit, which you received that does not exceed your Low rate cap on super lump sum benefits.

If you exceed the threshold, you are liable to pay the Medicare levy surcharge.

Income for surcharge purposes is only used to determine whether you are liable to pay the Medicare levy surcharge. It is not used to calculate how much surcharge you pay. The Medicare levy surcharge is only levied on the total of your taxable income and total reportable fringe benefits amount (including the net amount on which family trust distribution tax has been paid). However this does not include - if you are aged 55 to 59 years old - any taxed element of a super lump sum, other than a death benefit, which you received that does not exceed your low rate cap.