What is the Medicare Levy Surcharge (MLS)?

The Medicare Levy Surcharge (MLS) is a tax set by the Australian Government. It applies to individuals and families on higher incomes who don’t have eligible private hospital cover. It goes directly to funding the national public Medicare system and was designed to encourage the use of the private hospital system to reduce the demand on Medicare.

How is it different from the Medicare Levy?

Most Australians will have to pay the Medicare Levy, regardless of whether they have private health insurance. The Medicare Levy Surcharge is an additional amount that is payable for individuals or families that are high income earners, and do not hold private health insurance.

Do I have to pay the MLS?

You may have to pay the Medicare Levy Surcharge if you or your dependants do not have private patient hospital cover and are:

  • A single person (without dependent children) and have a taxable income above $97,000 (including any reportable fringe benefits of $1,000 or more)
  • A family (including a couple or single parent) with a combined taxable income above $194,000 (including any reportable fringe benefits of $1,000 or more)

How much is the MLS?

The Medicare Levy Surcharge is based on your family status at 30 June and your income, and is determined by the income tier that you fall into for the financial year. The income threshold tiers were updated on 1 July 2024 and the following table details the income threshold tiers and MLS you may have to pay for the current financial year.

Income threshold tiers and MLS rates effective from 1 July 2024

If you are: And your combined taxable income is:
Single $97,000 or less $97,001 - $113,000 $113,001 - $151,000 $151,001 or more
Couple/Family/Single Parent (threshold increases by $1,500 per child after your first) $194,000 or less $194,001 - $226,000 $226,001 - $302,000 $302,001 or more
Then your Tier and Medicare Levy Surcharge are:
Tier Base Tier Tier 1 Tier 2 Tier 3
MLS you may have to pay as a % of your income 0.0% 1.0% 1.25% 1.5%

How can I avoid paying the MLS?

If your annual taxable income falls within the MLS range you can avoid the tax altogether by taking out hospital cover. You will avoid paying MLS for the number of days you’re covered in the previous financial year.

Where can I get more information?

For more information about the Australian Government Rebate or the Medicare Levy Surcharge you can: