Find out exactly what you owe, what you can save, and how private health insurance affects your tax bill.
Enter your details to see exactly how much MLS you pay and whether private health cover makes financial sense for you.
Most Australians pay the Medicare Levy, which is 2% of taxable income and funds the public health system. The Medicare Levy Surcharge (MLS) is a separate additional charge that applies only to higher income earners who do not hold eligible private hospital cover. It was introduced to encourage higher income earners to use the private system and reduce demand on public hospitals.
| Tier | Annual income (single) | MLS rate | On a $120,000 income |
|---|---|---|---|
| No surcharge | Under $101,001 | 0% | $0 |
| Tier 1 | $101,001 to $140,000 | 1.0% | $1,200 |
| Tier 2 | $140,001 to $180,000 | 1.25% | $1,500 |
| Tier 3 | Over $180,000 | 1.5% | $1,800 |
| Tier | Combined income | MLS rate |
|---|---|---|
| No surcharge | Under $202,001 | 0% |
| Tier 1 | $202,001 to $280,000 | 1.0% |
| Tier 2 | $280,001 to $360,000 | 1.25% |
| Tier 3 | Over $360,000 | 1.5% |
To avoid the MLS, your hospital cover must be with a registered Australian health insurer and have an excess no greater than $750 for singles or $1,500 for couples and families. Extras-only cover does not count.
The rebate is a government contribution toward the cost of your private health insurance premium. The amount depends on your income and age and is means-tested, so higher income earners receive a smaller rebate or none at all.
| Income tier | Annual income | Under 65 | 65 to 69 | 70 and over |
|---|---|---|---|---|
| Base tier | Under $101,001 | ~24.6% | ~28.7% | ~32.8% |
| Tier 1 | $101,001 to $140,000 | ~16.4% | ~20.5% | ~24.6% |
| Tier 2 | $140,001 to $180,000 | ~8.2% | ~12.3% | ~16.4% |
| Tier 3 | Over $180,000 | 0% | 0% | 0% |
You can claim the rebate as a premium reduction, where your insurer applies it directly and you pay a reduced premium each month. Or you can claim it as a tax offset when you lodge your tax return. Most people find the premium reduction simpler.
Lifetime Health Cover (LHC) loading is designed to encourage Australians to take out private hospital cover earlier in life. If you do not take out hospital cover by 1 July following your 31st birthday, you pay a 2% loading on top of your hospital premium for every year you were without cover after turning 30, up to a maximum of 70%.
| Age at first taking out cover | Loading | Example: $150/month base premium |
|---|---|---|
| 30 or under | 0% | $150/month |
| 31 | 2% | $153/month |
| 35 | 10% | $165/month |
| 40 | 20% | $180/month |
| 50 | 40% | $210/month |
| 65 or over | 70% (maximum) | $255/month |
Each year your health fund sends you a private health insurance tax statement, usually by mid-July. This document shows your insurer details, membership number, days held, premiums paid, and government rebate received.