Medicare Levy

Subject to the minimum income thresholds, the basic Medicare Levy is calculated as a percentage of taxable income, and applies to resident Australian taxpayers.

The current full basic levy is 2.0%  

The current rate of 2% medicare levy has been in place since 1 July 2014. A proposal to increase the levy to 2.5% from 1 July 2019 for the 2019-20 and following years was abandoned by the government.

Levy until 30 June 2014

The full basic levy was calculated at 1.5% until 30 June 2014. Historical details for the rates in earlier years are here.

Medicare Levy Surcharge

The Medicare Levy Surcharge (“MLS”) – applies in addition to the basic Medicare levy if sufficient private patient hospital insurance cover is not maintained and ranges from 1% to 1.5% based on an income test. See details of the Medicare Levy Surcharge here.

Income Thresholds

There are separate income thresholds for the medicare levy for individuals and families as set out below. Once the minimum income threshold is reached, the levy is payable on the entire income unless a reduction or exemption is available.

The levy formulae operate to ensure that there is no Levy payable if income is not high enough to pay income tax. Pensioners below Age Pension age do not pay the Medicare levy when they have no tax to pay.

Levy Calculations

  • At lower incomes over the minimum threshold, a special shade-in rate of levy (10% of the amount over the threshold) is used, until income is high enough for the full rate to apply
  • The full basic levy is calculated at 2.0%  (1.5% up to 30 June 2014)
  • Some taxpayers are exempt. To be entitled claim the exemption requires a Medicare entitlement statement from the Department of Human Services.

Medicare Levy Income Thresholds

Medicare levy low-income thresholds are typically adjusted for inflation once a year and published in the Federal Budget which is usually in May of the current tax year.

2017-18 Medicare Levy Income Thresholds

Medicare levy low-income thresholds for singles, families and seniors and pensioners are increased (by CPI) for the 2017-18 year.

  • The threshold for singles will be increased from $21,655 to $21,980
  • The family threshold will be increased from $36,541 to $37,089.
  • For single seniors and pensioners, the threshold will be increased from $34,244 to $34,758.
  • The family threshold for seniors and pensioners will be increased from $47,670 to $48,385.
  • For each dependent child or student, the family income thresholds increase by a further $3,406, instead of the previous amount of $3,356

 

2016-17 Medicare Levy Income Thresholds

Medicare levy low-income thresholds for singles, families and seniors and pensioners are increased (by CPI) for the 2016-17 year.

  • The threshold for singles is increased to $21,655.
  • The family threshold is increased to $36,541 plus $3,356 for each dependent child or student.
  • For single seniors and pensioners, the threshold is increased to $34,244.
  • The family threshold for seniors and pensioners is increased to $47,670 plus $3,356 for each dependent child or student.

 

2015-16 Medicare Levy Income Thresholds

Thresholds are uplifted from the previous year according to an annual CPI adjustment.

  • Incomes below the thresholds are free of the Medicare Levy.
  • For income over the lower limits, the levy is 10% of the excess.
INDIVIDUALS
2015-16 Medicare Levy Low Income Thresholds
Lower Income LimitUpper Income Limit
Eligible for the SAPTO$33,738$42,172
All other taxpayers$21,335$26,668

 

FAMILIES
2015-16 Medicare Levy Income Thresholds
Lower Income LimitUpper Income Limit*
Families not eligible for SAPTO$36,001$45,002
Individuals with a spouse and/or dependants eligible for the SAPTO$46,966$58,707

 * For families the lower threshold is increased by the amount of $3,306 per dependent child

Medicare Levy low income thresholds are indexed annually in the last quarter of each financial year.     
Low income 10% shade-in – Families shade-in formula   

 

2014-15 Medicare Levy Income Thresholds

Thresholds increase from the previous year according to a CPI adjustment which takes effect from 1 July 2014.

  • Incomes below the thresholds are free of the Medicare Levy.
  • For income over the lower limits, the levy is 10% of the excess.
INDIVIDUALS
2014-15 Medicare Levy Low Income Thresholds
Lower Income LimitUpper Income Limit
Eligible for the SAPTO$33,044$41,306
All other taxpayers$20,896$26,121

 

FAMILIES
2014-15 Medicare Levy Income Thresholds
Lower
Income Limit
Upper
Income Limit*
Families not eligible for SAPTO$35,261$44,077
Individuals with a spouse and/or dependants eligible for the SAPTO$46,000$57,500

*For families the lower threshold is increased by the amount of $3,238 per dependent child

Medicare Levy low income thresholds are indexed annually in the last quarter of each financial year.

 

2013-14 Medicare Levy Income Thresholds

Thresholds for families were increased from the previous year according to a CPI adjustment with effect from 1 July 2013. Individuals and pensioners remain unchanged, having already received adjustments in excess of CPI. (Budget 2014-15)

  • Incomes below the thresholds are free of the Medicare Levy.
  • Between the upper and lower income limits, the levy is 10% of the excess over the lower limit. Above the upper limit the full Medicare levy rate applies.
INDIVIDUALS
2013-14 Medicare Levy Low Income Thresholds
Lower Income LimitUpper Income Limit
Eligible for the SAPTO$32,279$37,975
All other taxpayers$20,542$24,167

 

FAMILIES
2013-14 Medicare Levy Income Thresholds
Lower
Income Limit
Upper
Income Limit*
Individuals with Dependants not eligible for SAPTO$34,367$40,432
Individuals with a spouse and/or dependants eligible for the SAPTO$46,000$54,117

* For families, the lower threshold is increased by the amount of $3,156 per dependent child and
the Upper Income Limit by $3,713

Medicare Levy low income thresholds are indexed annually in the last quarter of each financial year.
Low income 10% shade-inFamilies shade-in formula

 

2012-13 Medicare Levy Income Thresholds

  • Incomes below the thresholds are free of the Medicare Levy.
  • Between the upper and lower income limits, the levy is 10% of the excess over the lower limit. (Above the upper limit the full Medicare levy rate applies.)
INDIVIDUALS
2012-13 Medicare Levy Low Income Thresholds
Lower Income LimitUpper Income Limit
Eligible for the SAPTO$32,279$37,975
All other taxpayers$20,542$24,167

 

FAMILIES
2012-13 Medicare Levy Income Thresholds
Lower Income LimitUpper Income Limit
Individuals with Dependants not eligible for SAPTO$33,693$39,639
Individuals with a spouse and/or dependants eligible for the SAPTO$46,000$54,117

For families, the Lower Income Limit is increased by the amount of $3,094 per dependent child and
the Upper Income Limit by $3,640

Medicare Levy low income thresholds are indexed annually in the last quarter of each financial year.
(2012-13 Medicare Levy Low Income Thresholds further info here)
Low income 10% shade-in Families shade-in formula

 

2011-12 Medicare Levy Low Income Thresholds

2012 Medicare Levy Income Thresholds
Lower Income LimitUpper Income Limit
Individual$19,404$22,828
Families$32,743$38,521
Incomes between Lower and Upper Limits pay a levy of 10% of the excess
Family income Lower thresholds increase by $3,007 per dependant child*
Family income Upper thresholds increase by $3,538 per dependant child*

 

2012 Medicare Levy Income Thresholds
For Non-Aged Pensioners
Lower Income LimitUpper Income Limit
Individual$30,451$35,824
Incomes between Lower and Upper Limits pay a levy of 10% of the excess

 

2012 Medicare Levy Income Thresholds
For SATO/Pensioners
Lower Income LimitUpper Income Limit
Individual$30,685$36,100
Families$44,500$52,353
Incomes between Lower and Upper Limits pay a levy of 10% of the excess
Family income Lower thresholds increase by $3,007 per dependant child*
Family income Upper thresholds increase by $3,538 per dependant child*

*’Dependant child’ for these purposes includes students under 25, subject to income and dependency criteria.

For claiming information, eligibility criteria and important definitions, visit the ATO site here (2012 link)

 

2010-11 Medicare Levy Income Thresholds

2011 Medicare Levy Income Thresholds
Lower Income LimitUpper Income Limit
Individual$18,839$22,164
Families$31,789$37,399
Incomes between Lower and Upper Limits pay a levy of 10% of the excess
Family income Lower thresholds increase by $2,919 per dependant child*
Family income Upper thresholds increase by $3,434 per dependant child*

 

2011 Medicare Levy Income Thresholds
For Non-Aged Pensioners
Lower Income LimitUpper Income Limit
Individual$30,439$35,811
Incomes between Lower and Upper Limits pay a levy of 10% of the excess

 

2011 Medicare Levy Income Thresholds
For SATO/Pensioners
Lower Income LimitUpper Income Limit
Individual$30,685$36,100
Families$44,500$52,353
Incomes between Lower and Upper Limits pay a levy of 10% of the excess
Family income Lower thresholds increase by $2,919 per dependant child*
Family income Upper thresholds increase by $3,434 per dependant child*

* ‘Dependant child’ for these purposes includes students under 25, subject to income and dependency criteria.

 

See also

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This page was last modified 2018-05-08