What is the Medicare levy?
The Medicare levy is a 2% tax on your taxable income that helps fund Australia's public healthcare system.
The Medicare levy is 2% of your taxable income, collected through the tax system to help fund Australia's public healthcare system, Medicare. Most Australian taxpayers pay it, though low-income earners get a reduction or exemption.
There's also the Medicare Levy Surcharge (MLS) of 1-1.5%, which is separate. The MLS applies to higher-income earners who don't have private hospital cover — it's designed to encourage people to take out private health insurance.
Key facts
- •Standard rate is 2% of taxable income
- •Low-income earners may pay a reduced levy or be fully exempt
- •Medicare Levy Surcharge (1-1.5%) is additional and only applies if you earn over $101,000 and don't have private hospital cover
- •Collected automatically through the PAYG withholding system
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Tax CalculatorFrequently asked questions
Can I opt out of the Medicare levy?
Generally no. Some people are exempt, such as those not entitled to Medicare benefits (e.g., certain temporary visa holders). You'd need to apply for a Medicare Levy Exemption Certificate.
Is the Medicare levy the same as the Medicare Levy Surcharge?
No. The levy (2%) is paid by almost everyone. The surcharge (1-1.5%) is extra and only applies to higher-income earners without private hospital cover.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.