ATO Certified Response
Author: KaraATO(Community Support)Community Support ATO Certified Response10 Mar 2026
Hi @JasonTj,
Australia's Financial Year (FY) starts from 1 July and ends 30 June (for example, our 2025-26 FY is 1 July 2025 to 30 June 2026).
Because we’re already in the 2025–26 financial year, if you take out private hospital cover now, you may still have some Medicare Levy Surcharge (MLS) to pay for the days before your cover starts.
The MLS is only charged for the days you don’t have the right level of hospital cover. So if you get insurance partway through the year, the surcharge will apply from 1 July up to the day your cover begins.
To avoid the MLS for a full FY, you need to have private patient hospital cover in place for the whole year.
The MLS is an extra charge for higher‑income earners who don’t have private hospital insurance. To count, your policy must:
- be hospital cover (not extras, travel insurance, or overseas cover)
- be from a registered Australian health insurer
- have an excess of $750 or less for a single person.
When you lodge your tax return, you’ll need to enter your private health insurance details so we can work out your MLS for the year. You can also use the Medicare levy calculator to estimate your surcharge.
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