How do I apply for a Medicare levy exemption in Australia?

You may be exempt from the Medicare levy or entitled to a reduction if you meet certain criteria. The most common situations are: you are a foreign resident for the full income year, you are not entitled to Medicare benefits (due to visa conditions), your income is below the low-income threshold, or you are eligible for the Senior Australian and Pensioner Tax Offset (SAPTO).

For the 2024-25 year, individuals with taxable incomes below $26,000 (and families below certain combined thresholds) are exempt from or pay a reduced Medicare levy. The exact thresholds are adjusted each year.

To claim an exemption, you generally do not need to apply separately. You answer the Medicare levy questions in your tax return (in myTax or through your tax agent), and the ATO calculates your liability based on your circumstances. For foreign residents who had Medicare levy withheld by their employer throughout the year, completing your tax return will generate a refund of that excess withholding. If you believe your employer is withholding Medicare levy incorrectly, you can lodge a PAYG withholding variation to stop the withholding during the year.