What is the Medicare levy?

Medicare is the scheme that gives Australian residents access to health care.

To help fund the scheme, resident taxpayers are subject to a Medicare levy. Normally, we calculate your Medicare levy at the rate of 1.5% of your taxable income. A variation to this calculation may occur in certain circumstances.

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 About tax offsets.

 In some cases you may be exempt from the levy or it may be reduced.

To work out if you are eligible for the exemption or the reduction based on family income, read:

• Medicare levy exemption, and
• Medicare levy reduction for people on low incomes.

Individuals and families on incomes above the Medicare levy surcharge thresholds who do not have private patient hospital cover may have to pay the Medicare levy surcharge.

This surcharge is in addition to the Medicare levy. We calculate it at the rate of 1% of your taxable income (including your total reportable fringe benefits). You will need to read Medicare levy surcharge to see if you have to pay the surcharge.

If you want to work out your Medicare levy before you receive your notice of assessment, you can use the Medicare levy calculator.

What to read/do next

• Medicare levy calculator
• Medicare levy reduction for people on low incomes
• Medicare levy exemption
• Medicare levy surcharge.

For help applying this information to your personal situation, you can:

• phone us on 13 28 61
• send an email enquiry to the Tax Office.

Last Modified: Thursday, 13 August 2009

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