The MLS is a surcharge for Australians who earn over a certain amount and don’t have private hospital cover. It’s there to help take the pressure off the public healthcare system by encouraging people to take out private health insurance.

How is the MLS different from the Medicare levy?

The Medicare levy is an amount most Australian taxpayers pay in addition to their taxable income. The levy is 2% of taxable income, though exemptions and reductions may apply for low-income earners, some foreign residents, and others.

How to estimate your MLS rate?

If you know your household’s taxable income, you can check which rate will apply to you.

Here’s an example of how the MLS works

According to the Australian Government, if you’re single and your taxable income is $120,000. Currently:

• You don’t have private hospital cover.
• Your income falls into Tier 2.
• MLS rate for Tier 2 = 1.25%.

1.25% of your annual income of $120,000 is $1,500

That means you’d pay $1,500 in tax for the Medicare levy surcharge on top of the standard 2% Medicare levy.