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Increase in the Medicare Levy

Increase in the Medicare Levy

By now, most of you will be aware of the government’s decision to increase the Medicare levy by 0.5% to fund Australia’s DisabilityCare program.

 

From July 1, 2014, the Medicare levy will increase from 1.5% to 2% of taxable income. What many people may not realise however is that the Medicare levy increase will cause a number of other tax rates to increase by 0.5% as well. These include taxation rates involving issues as diverse as fringe benefits tax, employee share schemes and even first home saver accounts.

 

A summary of the key tax rates that are linked and will be affected by the increase in the Medicare levy set out below:

 

FBT 47%

Withholding for TFN or ABN not quoted 47%

Trusts Tax 47%

Employee Share Schemes Withholding 47%

First Home Savers Accounts Misuse Tax 47%

Super excess contributions tax 32%

Super excess Non concessional contributions tax 47%

Super excess untaxed rollover amounts tax 47%

 

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