Hi our family income will goto 200k as my wife started work few months ago and we both and our kid never had a private health insurance so far this year. My question is would MLS be calculated for 200k for the whole year or only for that part of the year when the income was 200k?
This seems unfair as if I buy a insurance now it is only prorated but income isn't ..it's a lot of double standards there?
Thank you
Not really.
Medicare Levy Surcharge calculations are more complicated than Medicare Levy itself, and takes into account other things like fringe benefit, reportable super contributions, investment losses (to name a few).
This will help you understand the MLS calculations: https://www.ato.gov.au/Individuals/Medicare-and-private-heal…
You'll be pinged for the portion of the year that you haven't had private health insurance.
i don't think it'd be fair on the contrary if someone decided to take out private health insurance on the 30th June expecting to get the tax deduction whole year, pretty sure insurance premiums are based on the date you take it out and not financial year.
To be honest you don't accidentally happen upon earning $200k a year
No earning that was not accidental of course. But not knowing MLS kicks in this way was. Anyway it's the ship that's now sailed
OP will be so shocked when he pays out his leave to join a new company, and then see his tax bill
What you mean mate don't scare me more. I did get some leaves paid out when changed a job isn't that pay taxed already before being given to me?
Ok, when you say "our income will go to $200k a year", do you mean that, for example, you are both on $100k a year? Or do you mean that, combined, you both will have actually earned $200k this financial year.
If the former (which I assume is the case, as your wife has only been working a few months), then you will not have to pay the MLS.
Unfortunately it's the latter that is our gross in hand salary will be 200k this year that is salary that we will receive together.
Ah ok then, good problem to have at least.
You still have time to decrease your taxable income.
Pump up your super as voluntary contributions or something
that does not work.
A voluntary super contribution would reduce your taxable income but it is then added back on when determining liability to pay the surcharge.
Doesn't work that way unfortunately
OP im in the same situation as you, not because we earned more but it is because i recently started a new job and left my old job of 15 years with a massive AL and LSL payout pushing me over the combined family income threshold.
There is no way to avoid the MLS unless you had private health insurance
MLS is a scam, put liberals last
You are looking at maybe 1% extra of your income as tax, which would be cheaper than any private health family cover you can get for the year.
Personally, at that income bracket, I think it would be unfair to simply call it 'unfair.'
Taxable income in your end of year tax return.