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Medicare Levy & Medicare Levy Surcharge Explained

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Medicare Levy & Medicare Levy Surcharge Explained

To have access to a great public healthcare system, most Australian residents pay the Medicare Levy, which is 2% of taxable income.

Foreign residents and some low wage earners are exempt from the Medicare Levy.

For example, a person with two young children earning less than $30,000 will not pay the Medicare Levy.

The Medicare Levy Is DIFFERENT To The Medicare Levy SURCHARGE

Singles who have a total income of more than $90,000 and families or couples earning more than $180,000 will pay an additional tax known as The Medicare Levy Surcharge unless they hold adequate private health insurance.

The income thresholds for the surcharge include Super contributions, fringe benefits and net investment losses.

For example, Greg and Sheila have combined total income of $200,000 but no private health insurance. They will pay the Medicare Levy Surcharge in addition to the Medicare Levy.

By having private health insurance cover for the entire tax year, Greg and Sheila may not be liable for the extra surcharge.

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Owen Raszkiewicz

Owen Raszkiewicz

Owen is the Founder of Rask, Lead Investment Analyst for Rask Invest and head educator at Rask Education. Prior to founding Rask, Owen was an investment analyst at the highly regarded managed funds research business Zenith Investment Partners and a Writer/Analyst for The Motley Fool Australia. Owen’s formal qualifications include a Master of Applied Finance and Master of Financial Planning from Kaplan Professional, Bachelor of Technology (Information Systems) from Swinburne University of Technology, Advanced Diploma of Financial Services (Financial Planning) and Diploma of Mortgage Broking Management. He's also completed level 1 of the Chartered Financial Analyst (CFA) program.

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