The Australian Government has introduced a number of tax initiatives over the years, which are designed to encourage Australians to purchase private health insurance earlier in life.
If you’re aware of how these incentives work, you may be able to dodge a tax deficit by pick up a private hospital policy.
The Medicare Levy Surcharge (MLS) is an additional tax on top of the Medicare Levy for Australian taxpayers who do not have an appropriate level of private hospital cover and earn above an income threshold. If you are a Single earning more than $90,000 of a Family earning more than $180,000 in a financial year, then the Medicare Levy surcharge may affect you.
If you’re an individual earning $90,000 per year, for example and you don’t have hospital cover, the MLS means that you’ll have to pay an extra $900 in tax (1% of your annual income). If you are considered to be a high income earner
The MLS will increase to up to 1.5% depending on your exact income.
To find out whether you are considered a high income earner (and whether Phoenix can help you avoid this MLS tax), please refer to the MLS table found in the link below.