Medicare Levy Surcharge

The Medicare Levy Surcharge (MLS) is an additional tax applied to a person’s taxable income when they do not have an appropriate level of private hospital cover and their income exceeds certain MLS thresholds.

Understanding the Medicare Levy Surcharge

The Medicare Levy Surcharge was introduced to encourage Australians in the higher income brackets (refer to the table below) who are eligible for Medicare, but do not have an appropriate level of private hospital cover, to take out private hospital insurance, reducing the demand on the public hospital system.

The MLS is calculated in addition to the standard Medicare Levy of 2%. It applies to a person and his or her dependants, including his or her spouse. A dependent is classified in this case as any children under 21 years of age, or any children who are full-time students and are under 25 years of age.

The MLS is paid on any period during which the person does not have hospital cover. Those who are exempt from the Medicare Levy do not need to pay the MLS. 

Suspension of membership

If you apply to CBHS to suspend your hospital cover for a short period, and we agree, this period of suspension may affect your MLS liability.

Income thresholds and surcharge levels

If you need to pay the MLS, it will be included with the Medicare Levy on your notice of assessment from the Australian Tax Office. 

The tables below outline the income thresholds and surcharges that apply from 1 April 2016 to 31 March 2017.


Singles earning...
$90,000 or less do not pay the MLS
$90,001 – $105,000 pay 1% in MLS
$105,001 - $140,000 pay 1.25% MLS
$140,001 or more pay 1.5% for MLS 
Families earning...
$180,000 or less do not pay the MLS
$180,001 - $210,000 pay 1% in MLS
$210,001 - $280,000 pay 1.25% in MLS
$280,001 or more pay 1.5% in MLS

If as a couple or a single parent you have two or more children, the family income threshold is increased by $1,500 for every MLS dependent child after the first child. For example, if you have three dependent children, your family income threshold will increase by $3,000.

To work out your annual income for MLS purposes, you can refer to the ATO's Medicare Levy Surcharge Income Calculator.

You can avoid having to pay the MLS by simply choosing any hospital cover product with CBHS. Our premiums are lower than the industry average, and as a not for profit health insurer we provide outstanding value and better per service limits to our members. We also offer a comprehensive range of extras and insurance products in addition to hospital cover.

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Connect with us

Feel free to contact us if you have any questions about the Medicare Levy Surcharge or any queries about our products and services. Our friendly team is ready to answer your queries by phone at 1300 654 123. You can also connect with us by sending an email to