Guide to Medicare levy

Reduction for people on low incomes

Most Australians are liable to pay the Medicare levy. However, this may vary according to your circumstances. The Medicare levy is 1.5% of your taxable income.

We will work out your Medicare levy (including any Medicare levy reduction) from the information you provide on your tax return.

If you want to work out your Medicare levy, you can use the Medicare levy calculator.

For assistance with completing the Medicare levy reduction or exemption question on your tax return, see M1 - Medicare levy reduction or exemption.

Generally, tax offsets do not reduce your Medicare levy. However, if you have excess refundable tax offsets, we use them to reduce your tax, including your Medicare levy. For more information, see the Guide to tax offsets.

Find your situation in the table below to work out whether you have to pay the Medicare levy.

Your circumstances

What to do

Your taxable income* is equal to or less than your lower threshold amount.

You do not have to pay the Medicare levy.

Your taxable income* is greater than your lower, and less than or equal to your upper, threshold amount.

You pay only part of the Medicare levy.

Your taxable income* is over your upper threshold amount, and you are single with no dependants.

You do not qualify for a reduction.

Your taxable income* is over your upper threshold amount but you:

had a spouse (married or de facto)

had a spouse that died during the year, and you did not have another spouse before the end of the year

are entitled to a child-housekeeper or housekeeper tax offset, or

were a sole parent at any time during the income year and you had sole care of one or more dependent children.

You may be eligible for a Medicare levy reduction based on family taxable income.

First work out your family taxable income.

Then work out your family taxable income limit.

* For the purpose of calculating the Medicare levy, your taxable income excludes the taxed element of certain superannuation lump sums received during the year while you were between 55 and 59 years old.

If you do not qualify for a reduction in the Medicare levy, you may still qualify for a Medicare levy exemption.

Medicare levy - home

Sections within Reduction for people on low incomes

Last Modified: Monday, 25 March 2013