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What is the Medicare Levy?

The Medicare Levy, which helps to fund Medicare, is a 2% income tax that's paid by most Aussies earning over $29,033. Some will be eligible for a partial or full exemption from the levy.

What you need to know

  • The Medicare Levy is charged at 2% of your annual income and goes towards funding Medicare.
  • You usually need to pay the full percentage if you earn over $29,033.
  • However, you may get an exemption if you are a low-income earner, or a reduction if you are a senior citizen.

What's the difference between the Medicare Levy and the Medicare Levy Surcharge?

The Medicare Levy is a 2% tax that goes towards funding the public health system. You pay a Medicare Levy in addition to the tax you pay on your taxable income. Most of us have to pay it unless we earn less than $23,226 a year.

The Medicare Levy Surcharge, on the other hand, is a tax that only applies if you earn over $93,000 a year and don't take out private hospital cover. It was put in place to encourage more Australians to take out private health insurance and alleviate the strain on the public healthcare system.

How much is the Medicare Levy?

The Medicare Levy is a flat 2% income tax for any earnings above the threshold set by the Australian Tax Office (ATO). These are the most recent figures, for 2020-21:

Medicare Levy 2021: When you pay

Single

Singles – $23,226

If you're single and your income is below $23,226, you won't pay the levy. You'll pay part of the Medicare Levy if your taxable income is between $23,227 and $29,033. The full 2% applies on anything over $29,033.

Family

Families – $39,167

For couples or single-parent families, the levy is reduced on any taxable income between $39,167 and $48,958, plus $4,496 per dependent child. The levy won't be charged if you earn less than $39,167 as a family.

Older woman

Seniors – $36,705

For seniors who are eligible for the seniors and pensioners tax offset, you pay the levy on any taxable income above $36,705. The 2% rate kicks in once you earn more than $45,881.

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Calculate your levy

To find out how much you'll need to pay, check out the ATO's Medicare Levy calculator. This allows you to estimate your Medicare Levy for the past four income years. Just have the following details handy:

  • Your taxable income
  • Your spouse or partner's taxable income (if any)
  • If you're eligible for a Medicare Levy exemption

Medicare Levy exemption

The Medicare Levy exemption is open to some Australians. Depending on your circumstances, you may be entitled to a full or partial exemption.

Who is exempt from the Medicare Levy?

You're exempt from paying the Medicare Levy if:

  • You are a foreign resident for tax purposes
  • You are not entitled to Medicare benefits
  • You earn under the lower threshold of $22,801
  • You qualify for a medical exemption
  • Your taxable income is greater than the lower threshold but less than the upper threshold
  • Your taxable income is greater than the lower threshold amount but you had a spouse
  • Your taxable income is greater than the lower threshold amount but you're entitled to an Invalid and Invalid Carer tax offset
  • Your taxable income is greater than the lower threshold amount but you were the sole carer of one or more dependent children

Full and half exemptions are available for blind pensioners, those on a Centrelink sickness allowance, and people who are entitled to full free medical treatment for all conditions under Defence Force arrangements or a Veterans' Affairs Repatriation Health Card (Gold Card). The requirements you must meet to qualify for this exemption vary depending on whether you are married or single, and whether you have any dependents.

How to claim Medicare Levy exemption

You can claim the Medicare Levy exemption when you lodge your tax return. You'll be asked:

  • What your annual income was (which will help determine your Medicare Levy exemption entitlements)
  • How many dependent children you had during the year
  • How many days you can claim a full exemption and how many days you can claim a half exemption
  • If you had a spouse at any time in 2020–2021, married or de facto
  • If you're entitled to any seniors tax offset

Should you get private health insurance on top of Medicare?

Unfortunately, Medicare doesn't cover everything – but private health insurance can help fill in the gaps. It can cover you for things like ambulance transportation, dental and optical, and often gives you access to treatment quicker than the public system.

If you want cover for those things and more, take a look at some of the health insurance policies below.

1 - 10 of 916
Name Product Treatments Price Apply
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
Join Bupa and get up to 12 weeks free on eligible products + 2&6 month waiting periods waived on extras. Domestic policies only. Terms and conditions apply.
$93.00
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
$94.39
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +4 other treatments covered
Great value Hospital cover with accidental injury and emergency ambulance cover with no annual limits. nib. As exciting as health insurance gets.
$94.56
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
Get up to 12 weeks free. For new joins by Jun 30 who maintain eligible combined hospital & extras. T&Cs apply. Learn more.
$96.88
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
Join Bupa and get up to 12 weeks free on eligible products + 2&6 month waiting periods waived on extras. Domestic policies only. Terms and conditions apply.
$97.86
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
  • +5 other treatments covered
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
Join Bupa and get up to 12 weeks free on eligible products + 2&6 month waiting periods waived on extras. Domestic policies only. Terms and conditions apply.
$99.59
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
Get up to 12 weeks free. For new joins by Jun 30 who maintain eligible combined hospital & extras. T&Cs apply. Learn more.
$99.93
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +3 other treatments covered
Great value Hospital cover with accidental injury and emergency ambulance cover with no annual limits. nib. As exciting as health insurance gets.
$100.93
per month
HCF MY FUTURE 750 BASIC PLUS
Basic Plus$750 excess
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
  • +7 other treatments covered
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +6 other treatments covered
Get up to 8 weeks free when you join eligible cover by 30 June and stay with HCF. T&Cs Apply.
$101.14
per month
Hospital
  • Rehabilitation
  • Joint reconstructions
  • Dental surgery
  • Hernia and appendix
  • +2 other treatments covered
Extras
  • General Dental
  • Major Dental
  • Optical
  • Hearing aids
  • +2 other treatments covered
Get up to 12 weeks free. For new joins by Jun 30 who maintain eligible combined hospital & extras. T&Cs apply. Learn more.
$101.21
per month
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All prices are based on a single individual with less than $93,000 income and living in Sydney.

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