Earn over $90K? You could save $900+ in tax with basic private health cover
We found four hospital policies that cost less than the minimum Medicare levy surcharge.
If you're a high earner, you could be hit with an extra levy at tax time if you haven't sorted out your private health cover.
This is because of the Medicare levy surcharge (MLS), a government tax set up to help relieve some of the burden on the public health system.
Am I liable for the Medicare levy surcharge?
The MLS applies only to single people who earn more than $90,000 and couples or families with a combined income of over $180,000.
If you're single, you'll be charged the MLS if you don't have hospital cover with an excess of $750 or less. For couples or families, you'll need cover with an excess of $1,500 or less to avoid the levy.
How much is the Medicare levy surcharge?
The levy you'll pay come tax time will be between 1% and 1.5% of your income, depending on your earning bracket.
Let's say you're earning just over $90k – that equates to a monthly tax of at least $75 (the rate increases if you earn more than $105k, and it goes up again after $140k).
How to get around the government tax
If you're eligible to pay the levy, there's some good news. You can sort out hospital cover for less than the cost of the actual surcharge. In addition to tax savings, of course, you'll also have some private hospital cover.
Finder's research team found four hospital policies that worked out to be cheaper than the minimum surcharge of $75 per month. That's assuming a single person who earns a smidge above the $90,000 minimum-earn threshold.
|Frank Entry Hospital (Basic+)||Basic||$750||$73.85||Get quote|
|HBF Basic Hospital Plus||Basic||$750||$74.15||Get quote|
|Health Partners Basic Hospital Plus||Basic||$750||$70.80|
|CBHS Basic Plus Hospital||Basic||$750||$74.29|
ahm starter basic plan is another option for just $75.10. Alternatively, you could look for a hospital and extras plan if you'd like a bit more from your health cover.
As tax season draws closer, now is a great time to find a health insurance policy that meets your needs – doing so could save you hundreds of dollars at the same time.