The Medicare Levy, Medicare Levy Surcharge & Private Health Care Rebate 2025
The Medicare Levy, Medicare Levy Surcharge (MLS), and Private Health Care Rebate are all administered through the taxation system and are affected by your level of taxable income.
Medicare Levy:
The Medicare Levy is a levy payable by all taxpayers, except those in low-income brackets. It remains at 2% of your personal taxable income in the 2024-25 financial year. The ATO calculates the exact amount when you lodge your tax return, and it will be shown on your Notice of Assessment for each financial year.
The Medicare levy low-income thresholds for the 2024-2025 financial year have increased from previous years:
- Individual: If your taxable income is less than $27,614, you are not required to pay the Medicare Levy.
- Family: The family threshold is $46,794. This threshold increases by $4,267 for each dependent child or student.
The threshold for seniors and pensioners entitled to the seniors and pensioners tax offset was increased to $41,242 for the 2024-2025 financial year.
If you are an employee, the Medicare Levy continues to be calculated as part of the tax deducted by your employer.
Medicare Levy Surcharge:
The MLS is an additional charge on top of the standard Medicare Levy. Whether the Medicare Levy Surcharge applies to you depends on your taxable income and whether you have adequate private hospital insurance.
The MLS thresholds for the 2024-2025 financial year are:
- Singles: $97,000
- Families: $194,000
The family income threshold increases by $1,500 for each dependent child after the first child.
If your taxable income is above these thresholds and you don't have private hospital cover, you may be required to pay the Medicare Levy Surcharge. The rate of the surcharge varies from 1% to 1.5% of your taxable income, depending on your income tier.
To avoid this surcharge, you, your spouse, and all your dependents must have hospital cover with a registered private health insurer. The extras cover alone is not sufficient.
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
| Single | $97,000 or less | $97,001 – $113,000 | $113,001 – $151,000 | $151,001 or more |
| Family | $194,000 or less | $194,001 – $226,000 | $226,001 – $302,000 | $302,001 or more |
| Medicare levy surcharge | 0% | 1% | 1.25% | 1.5% |
Private Health Care Rebate:
This rebate helps to reduce the cost of your private health insurance premiums and is income tested on a single or family income basis.
The income thresholds for the Private Health Insurance Rebate for the 2024-2025 financial year are the same as the MLS thresholds, as outlined in the table above.
The family income thresholds are increased by $1,500 for each dependent child after the first child.
Single parents and couples, including those separated from their spouse and those whose spouse has passed away, are assessed on the family income tiers.
The Private Health Insurance rebate percentages were updated on 1 April 2025. The exact percentage you receive depends on your income tier and the age of the oldest person covered by the policy. There are different rebate percentages for those under 65, aged 65-69, and aged 70 and over.
For more information, please refer to the ATO here.
Disclaimer
This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in these articles is for guidance only and should not be relied upon without obtaining professional advice having regard to your direct circumstances.
