In LodgeiT, the "Income for medicare levy surcharge threshold" that is captured in the Estimate page is maximum threshold below the amount of "Income for medicare levy surcharge". Below are 2 examples for illustration:
Note: For the samples below, the assumption is that the taxpayer has 2 dependents.
Click here: Medicare Levy Surcharge Calculator
Example 1: The "Income for medicare levy surcharge threshold" shown in the image below is 195,500, because the "Income for medicare levy surcharge" amount is 220,000. The maximum family threshold below the amount 220,000 is $194,000 plus the 1,500 amount for the dependent after the 1st child dependent to arrive with total of $195,500.
Example 2: The "Income for medicare levy surcharge threshold" shown in the image below is 227,500 because the "Income for medicare levy surcharge" amount is 250,000. The maximum family threshold below the amount 250,000 is $226,000 plus the 1,500 amount for the dependent after the 1st child dependent to arrive with total of $227,500.
ATO related link: https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates
FY 2025 threshold table:
For latest Threshold rates, refer here - https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates
Common Causes of MLS Calculation Errors:
- Incorrect ATI thresholds
- Failure to account for private health insurance coverage.
- Errors in reporting income components (e.g., reportable fringe benefits or investment income).
- Software not updated for the latest tax rules.