11/03/2026
Cancelling or reducing your private health insurance may increase your tax at tax time.
You may need to pay the Medicare levy surcharge (MLS) if your income for surcharge purposes is above the threshold, and you don’t have an appropriate amount of health cover.
The income used to work out if you are liable for MLS isn’t just your taxable income, it also includes:
• certain salary sacrifice amounts
• reportable Fringe Benefits
• net investment losses
• certain super contributions
• your partner’s income for surcharge purposes.
Depending on how much you earn, that could be an extra 1%–1.5% of your taxable income.
