looky

I have some questions on the medicare levy in Australia.

Do they deduct it forthnightly, monthly or at the end of the financial year and you claim the year's worth of medicare already deducted back with a medicare levy exemption certificate at the income tax return?

So if I were to appy for a medicare levy exemption certificate I would apply at the end of the financial year (July to June) before submitting an income tax return? When do I have to submit the income tax return?

When should I apply for the exemption certificate?

http://www.medicareaustralia.gov.au/...ses_011005.pdf

It also says on the form in the link that you should not apply for a levy certificate unless you are leaving the country and will be submitting an income tax return at the end of the financial year. What does it mean? So I can't apply for it if I am working in Australia? Doesn't make sense! I am really confused by all these mambo jumbo on income tax and medicare levy!

I am not from a country with a reciprocal health system with Australia by the way.

There is also this medicare levy surcharge nonsense at 1% of the taxable income, do I need to apply for some sort of certification to be exempted from it too? I will be on private health insurance in Australia.

NickyC

The basic Medicare Levy of 1.5% is usually automatically deducted from your pay. The tax tables that employers use to calclulate tax has the basic Medicare Levy included. So if you're paid fortnightly, you pay your levy fortnightly, if you're paid monthly, you pay your levy monthly.

The extra 1% levy is never deducted from your pay. If you have to pay it, the ATO will send you a bill for it - after they receive your tax return at the end of the financial year.

I've never been exempt from paying the Medicare Levy - but what it looks like to me is this:

1. You pay your basic levy thoughout the year (automatically via your pay).
2. You get a Medicare Exemption Certificate at the end of the financial year.
3. When you file your tax return you include the Certificate.
4. ATO sees that you're exempt from paying the levy so they refund you what you've already paid.
5. ATO sees that you're exempt from paying the levy so they don't charge you the extra 1%.

The link you gave doesn't say that you can only apply for the certificate when you are leaving Australia - it says you can only apply for a certificate for the current financial year, if you are leaving Australia.

If you are staying in Australia, you will always be applying for the Exemption certificate for the previous financial year (ie. you apply for the 2007/08 certificate AFTER June 2008, you apply for the 2008/09 certificate AFTER June 2009).

Hope this clarifies things for you.

looky

Cheers Nicky,

Great help!