• ## Working out the Medicare levy adjustment

How you work out the Medicare levy adjustment varies depending on the number of dependent children your employee is claiming, see either:

### Employee claiming spouse and/or one to five dependent children

Input the monthly earnings into the Medicare levy adjustment look-up tool (XLSX, 56.2KB)This link opens in a new window and find the corresponding amount of Medicare levy adjustment in the appropriate column.

Example

The employee has monthly earnings of \$1,856.24 and is claiming four dependent children on the Medicare levy variation declaration. Input \$1,856.24 into the Medicare levy adjustment look-up tool (XLSX, 56.2KB)This link opens in a new window and find the corresponding Medicare levy adjustment of \$9.00 from the ‘4 children’ column.

End of example

### Employee with more than five dependent children

How you work out the Medicare levy adjustment for an employee with more than five dependent children varies depending on the monthly earnings of your employee - refer to:

#### Monthly earnings less than \$4,378

Use the ‘5 children’ column. Input the monthly earnings into the Medicare levy adjustment look-up tool (XLSX, 56.2KB)This link opens in a new window and find the corresponding amount of Medicare levy adjustment from the ‘5 children’ column.

Example

The employee has monthly earnings of \$1,829.48 and is claiming six dependent children. Input \$1,829.48 into the Medicare levy adjustment look-up tool (XLSX, 56.2KB)This link opens in a new window and find the corresponding Medicare levy adjustment of \$4.00 from the ‘5 children’ column.

End of example

#### Monthly earnings of \$4,378 or more but less than the column B amount that corresponds to the number of dependent children claimed

Round the monthly earnings down to the next dollar amount. Take 2% of that amount and round to the nearest dollar.

Example

The employee has monthly earnings of \$4,679.60 and is claiming seven dependent children. Take 2% of \$4,679.00 (the next lower dollar amount), this equals \$93.58.

The Medicare levy adjustment is \$94, rounded to the nearest dollar.

End of example

#### Monthly earnings of \$4,378 or more and greater than the column B amount but less than the column A amount that corresponds to the number of dependent children claimed

Complete steps 1–4 below:

1. Take 2% of the relevant column B amount. Round the result to the nearest cent.
2. Take 8% of the difference between the monthly earnings (round down to the next dollar) and the column B amount. Round the result to the nearest cent.
3. Subtract the result of step 2 from step 1.
4. Round the result to the nearest dollar.

Example

The employee has monthly earnings of \$5,350.67 and is claiming eight dependent children.

1. 2% × \$5,204.08 (column B amount for eight children)
= \$104.08
2. 8% × (\$5,350.00 – \$5,204.08)
= 8.0% × \$145.92
= \$11.67
3. \$104.08 – \$11.67
= \$92.41
4. \$92.00 (\$92.41 rounded to the nearest dollar).

The Medicare levy adjustment is \$92.

End of example