what is medicare levy

The Medicare levy is an additional amount that Australian taxpayers pay on top of their income tax, which helps fund some of the costs of Australias public health system known as Medicare. The Medicare levy is currently set at 2% of taxable income. However, some taxpayers may be eligible for a reduction or exemption from paying the Medicare levy, depending on their income and circumstances. The Medicare levy surcharge is an additional levy paid by Australian taxpayers who do not have private hospital cover and who earn above a certain income. The surcharge aims to encourage individuals to take out private hospital cover and use the private system to reduce the demand on the public Medicare system. The surcharge is calculated at the rate of 1% to 1.5% of income for Medicare Levy Surcharge purposes, in addition to the Medicare Levy of 2% .