2nd Jun 2016

Get ready for your tax return


  • Do you want to reduce your tax?
  • There is one tax you can do something about it. This is Medicare Levy Surcharge (MLS).
  • Do you need private patient hospital cover?

The MLS is an additional tax and applies to Australian residents for taxation purposes who are high income earners and don’t have an appropriate level of hospital cover. If you or your family do not have an appropriate level of private patient hospital cover you may be required to pay the MLS.

For 2015-16 the base income threshold is $90,000 for singles and $180,000 for families. General cover, commonly known as ‘extras’, is not private patient hospital cover. It covers items such as optical, dental, physiotherapy or chiropractic treatment.

Avoid paying the Medicare Levy Surcharge (MLS)

To be exempt from the MLS, consider having an appropriate level of private patient hospital cover before 30 June 2016 if:

  • your annual income is more than $90,000; or
  • your annual income with your spouse annual income is more than $180,000.

Income thresholds and MLS rate for 2015-16 & 2016-17

Unchanged Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001 – $105,000 $105,001 – $140,000 $140,001 or more
Families $180,000 or less $180,001 – $210,000 $210,001 – $280,000 $280,001 or more
Medicare levy surcharge rate 0% 1% 1.25% 1.5%

For families, the income thresholds increase by $1,500 for each MLS dependent child after the first.

This is a general advice, for more information and to discuss your individual case please contact us