What is the Medicare Levy?
The Medicare Levy is a tax paid by people who earn above a certain amount every year, in order to partially fund Medicare. The ATO advises that while it’s usually 2%, you may pay a reduced rate depending on your income.
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How much is the Medicare Levy?
Taxpayers, who earn over $26,668/year, pay a Medicare Levy of 2% of their taxable income. If you were earning $50,000/year, then $1,000 of your taxable income would go towards financing Medicare.
Who pays the Medicare Levy?
If your taxable income is above a certain threshold, you will have to pay a Medicare Levy of 2%. If your taxable income is below the threshold, your Medicare Levy is reduced. Some Australians might not have to pay the levy at all because their income is below the minimum threshold.
Find out what level of Medicare Levy you will pay this tax year with the ATO Medicare Levy Calculator.
We have provided a snapshot of current low premium policies in the comparison table below with links direct to the providers website. Please note that this table has been formulated based on a single male born in 1987 seeking cover for hospital only in NSW, sorted by Star Rating (highest first). You can try this interactive tool for yourself here.
Who doesn’t have to pay the Medicare Levy?
Some people have an exemption and do not have to pay the Medicare Levy at all (ATO):
- Foreign resident
- Norfolk Island resident
- Person who is not entitled to Medicare benefits
Some people do not have to pay the Medicare Levy in full, so they pay a lower rate:
- People who earn less than $21,335/year (or $33,738 for seniors and pensioners): Do not pay the Medicare Levy at all
- People who earn less than $26,668/year (or $42,172 for seniors and pensioners): Only pay part of the Medicare Levy
There are many benefits to be gained from having private health insurance in addition to being in the public health system if you can afford it. Use the Canstar website to do your research about what fund is right for you!