THE MEDICARE LEVY SURCHARGE The Medicare Levy Surcharge is a Levy, or an extra tax, on Australian taxpayers who do not have private hospital cover and who earn above $77,000 for individuals and $154,000 for couples or families, increasing by $1,500 for each additional child after the first.   The surcharge is calculated at the rate of 1% of taxable income. It is in addition to the Medicare Levy of 1.5%, which is paid by most Australian taxpayers. The Medicare Levy Surcharge is imposed on individuals and couples or families earning over the threshold who do not have an appropriate level of hospital insurance.   In 2010-11, the thresholds are: * a single person with an annual taxable income greater than $77,000; or * a family or couple with a combined taxable income greater than $154,000. The family income threshold increases by $1,500 for each dependent child after the first. Note:These thresholds will be indexed in future to keep pace with changes to average wages. Please refer back to this site to see the current thresholds.   To avoid the surcharge, you must have an approved hospital cover policy with a registered health insurer with a low front-end deductible, or with an excess equal to or less than $500 per annum for single policies, or $1,000 per annum for families/couples. The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system to reduce the demand on the public system. Further Medicare Levy Surcharge (MLS) information is available from the Australian Taxation Office (ATO) website >>