Medicare is the scheme that gives Australian residents access to health care. To help fund the scheme, resident taxpayers are subject to a Medicare levy. Normally, the Tax office calculate the Medicare levy at the rate of 1.5% of your taxable income. A variation to this calculation may occur in certain circumstances.
The 2010 income thresholds for singles and family incomes (ie the minimum and maximum amounts a taxpayer/family can earn before they are required to pay the Medicare Levy, or before stepping up into the next levy bracket) are as follows:
|SINGLE INCOME||FAMILY INCOME||LEVY|
|$17,794 OR LESS||$30,025** or less||Nil|
|$17,795 – $20,934||$30,026** – $35,323^||*|
|> $20,934||> $35,323^||1.5%|
|If eligible for pensioner tax offset|
|$25,299 or less||$30,025** or less||Nil|
|$25,300 – $29,793||$30,026** – $35,323^||*|
|> $29,763||> $35,323^||1.5%|
|If eligible for senior Australians tax offset|
|$28,867 or less||$42,000**||Nil|
|$28,868 – $33,961||$42,001** – $49,412^||*|
|> $33,961||> $49,412^||1.5%|
* 10 cents for every dollar between these amounts.
** For each dependant child, add $2,757.
^ For each dependant child, add $3,243.
Generally, tax offsets do not reduce your Medicare levy. However, if you have excess refundable tax offsets, the Tax Office use them to reduce your income tax liability which could include your Medicare levy. These offsets include the private health insurance rebate, franking tax offset, baby bonus and education expenses tax offset.
To calculate your Medicare levy amount, the Tax Office has provided their Medicare levy calculator.