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 your taxable income and funds the public health system. The Medicare Levy Surcharge (MLS) is a separate, additional charge that only applies to higher income earners who do not hold eligible private hospital cover.
The government introduced the MLS to encourage higher income earners to take out private hospital cover, which reduces demand on the public system.
| Income tier | Annual income (single) | MLS rate | Example: $120,000 income |
|---|---|---|---|
| No surcharge | Under $101,000 | 0% | $0 |
| Tier 1 | $101,001 to $140,000 | 1.0% | $1,200 |
| Tier 2 | $140,001 to $180,000 | 1.25% | $1,750 |
| Tier 3 | Over $180,000 | 1.5% | $2,700 |
| Income tier | Combined income | MLS rate |
|---|---|---|
| No surcharge | Under $202,000 | 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 from 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. It is means-tested, so higher income earners receive a smaller rebate or no rebate at all.
| Income tier | Annual income | Under 65 | 65 to 69 | 70 and over |
|---|---|---|---|---|
| Base tier | Under $101,000 | 24.608% | 28.710% | 32.812% |
| Tier 1 | $101,001 to $140,000 | 16.405% | 20.507% | 24.608% |
| Tier 2 | $140,001 to $180,000 | 8.202% | 12.303% | 16.405% |
| Tier 3 | Over $180,000 | 0% | 0% | 0% |
You can claim the rebate in two ways. The most common is as a premium reduction, where your insurer applies the rebate directly and you pay a reduced premium each month. Alternatively you can claim it as a tax offset when you lodge your tax return. Most people find premium reduction simpler.
Lifetime Health Cover (LHC) loading is designed to encourage Australians to take out private hospital cover earlier in life rather than waiting until they need it. 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.
| Age you first take out cover | Loading | Example: $150/month 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 |
You are exempt from LHC loading if you were born on or before 1 July 1934, or if you have been a new migrant to Australia and took out cover within 1,094 days of registering for Medicare.
Each year your health fund sends you a private health insurance tax statement, usually by mid-July. This statement shows your insurer details, your membership number, the number of days you held cover, and the premiums you paid and any government rebate received.
If your health fund has denied a claim, delayed a payment, or handled your complaint poorly, you have rights. DisputeSmart helps Australians navigate insurance disputes and AFCA complaints.
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