What is a Medicare levy?

Medicare is the scheme that gives Australian residents access to health care. To help fund this scheme, resident taxpayers pay a Medicare levy. The amount of levy that is paid depends on the level of income earned and is above and beyond the income tax. The Medicare levy is not reduced by any tax offsets unless they are refundable offsets.

At this time, your Medicare levy is based on 1.5% of your taxable income. This rate can and will vary based on various circumstances. In certain circumstances the levy can may reduced or you may even be exempt. A threshold amount below which you don’t pay the Medicare levy exists.

Individuals and families on higher incomes who not have private health insurance, may have to pay an additional surcharge. The surcharge is in addition to the Medicare levy and is calculated at the rate of 1% of tour taxable income. The Medicare levy is withheld from your pay by your employer along with the tax you need to pay.

People who are not Australian residents for tax purposes do not pay the Medicare levy, as they are not entitled to Medicare benefits

Call Tax Matters to help you with any questions about the Medicare levy or to calculate your Medicare levy.