Medicare Levy Vs Medicare Levy Surcharge
In Australia, the Medicare Levy and the Medicare Levy Surcharge are both related to the country's healthcare system, but they have distinct differences. Here's an explanation of each and their respective thresholds:
Thresholds:
- Individuals: The Medicare Levy is payable for individuals with taxable incomes above a certain threshold. For the 2021-2022 financial year, the threshold was $23,226.
- Families: For families, the threshold is higher and increases based on the number of dependent children. The threshold for the 2021-2022 financial year ranged from $39,167 for individuals with no dependent children to $55,695 for individuals with one dependent child, with an additional $4,406 for each subsequent child.
It's important to note that some individuals may be eligible for Medicare Levy exemptions or reductions based on specific circumstances such as low income, certain medical conditions, or being a foreign resident.
Thresholds:
- Singles: The surcharge is applicable to singles with taxable incomes above a certain threshold. For the 2021-2022 financial year, the threshold was $90,000.
- Families: For families, the threshold increases based on the combined taxable income of the family. The threshold for the 2021-2022 financial year ranged from $180,001 for couples and single-parent families to $270,001 for families with one dependent child, with an additional $1,500 for each subsequent child.
The Medicare Levy Surcharge is calculated as a percentage of taxable income and varies based on income tiers. The surcharge rates range from 1% to 1.5% of taxable income, depending on income levels.
By obtaining eligible private health insurance with appropriate hospital cover, individuals can avoid paying the Medicare Levy Surcharge even if their income exceeds the threshold.
It's important to consult with our office for the most up-to-date information and any changes to the thresholds or rates.
Email - info@befinancial.com.au
32 Main Rd Bakery Hill, VIC 3350
1. Medicare Levy:
The Medicare Levy is a compulsory levy imposed on most Australian taxpayers to help fund the Medicare system, which provides subsidised healthcare services to citizens and permanent residents. The current Medicare Levy rate is 2% of taxable income.Thresholds:
- Individuals: The Medicare Levy is payable for individuals with taxable incomes above a certain threshold. For the 2021-2022 financial year, the threshold was $23,226.
- Families: For families, the threshold is higher and increases based on the number of dependent children. The threshold for the 2021-2022 financial year ranged from $39,167 for individuals with no dependent children to $55,695 for individuals with one dependent child, with an additional $4,406 for each subsequent child.
It's important to note that some individuals may be eligible for Medicare Levy exemptions or reductions based on specific circumstances such as low income, certain medical conditions, or being a foreign resident.
2. Medicare Levy Surcharge:
The Medicare Levy Surcharge is an additional surcharge imposed on high-income earners who do not have private hospital cover and choose to rely solely on the public Medicare system. It is designed to encourage individuals to take out private health insurance and reduce the burden on the public healthcare system.Thresholds:
- Singles: The surcharge is applicable to singles with taxable incomes above a certain threshold. For the 2021-2022 financial year, the threshold was $90,000.
- Families: For families, the threshold increases based on the combined taxable income of the family. The threshold for the 2021-2022 financial year ranged from $180,001 for couples and single-parent families to $270,001 for families with one dependent child, with an additional $1,500 for each subsequent child.
The Medicare Levy Surcharge is calculated as a percentage of taxable income and varies based on income tiers. The surcharge rates range from 1% to 1.5% of taxable income, depending on income levels.
By obtaining eligible private health insurance with appropriate hospital cover, individuals can avoid paying the Medicare Levy Surcharge even if their income exceeds the threshold.
It's important to consult with our office for the most up-to-date information and any changes to the thresholds or rates.
Book an appointment with Befinancial Accounting to have your tax return completed.
Contact - 1300 699 161Email - info@befinancial.com.au
32 Main Rd Bakery Hill, VIC 3350