November 2025 Newsletter

Please click on the following link to view this month's newsletter for November 2025. We would like to highlight the following articles:-

What’s the difference between the Medicare levy and the Medicare levy surcharge?

he Medicare levy is a compulsory 2% charge on taxable income that helps fund Australia’s public healthcare system. It applies to most taxpayers and is typically withheld from salary throughout the year. Having private health insurance does not remove the requirement to pay this levy. However, certain individuals may be entitled to a reduced rate or exemption.

The Medicare levy surcharge (MLS) is a separate charge aimed at encouraging higher-income earners to take out private hospital insurance and ease the pressure on the public system. You may be liable for the MLS if your adjusted taxable income exceeds the threshold ($101,000 for singles or $202,000 for families in 2025–2026) and you, your spouse, or dependants do not all hold adequate private hospital cover for the full year. The surcharge begins at 1% and increases with income.

To avoid the surcharge, you must have an appropriate level of private hospital cover — not just extras only cover such as dental or optical cover — with an excess of no more than $750 for singles or $1,500 for families. The policy must cover all relevant family members for the full income year.

The truth about FBT and your business’s work Utes

A common misconception among employers is that providing a dual cab ute to employees automatically avoids fringe benefits tax (FBT). However, the FBT exemption only applies if specific conditions are met:-

Condition one – eligible vehicle: The ute must be designed to carry a load of at least one tonne, more than eight passengers, or otherwise be primarily a load-carrying vehicle rather than a passenger vehicle. Many dual cab utes meet this requirement, but this alone does not make them FBT-exempt.
Condition two – limited private use: Any personal use of the vehicle must be minor, infrequent, and irregular. The ATO considers travel between home and work and incidental private trips as acceptable. However, using the ute as a family car for weekend getaways, school runs, or shopping trips breaches this rule and triggers an FBT liability.

If these conditions are not met, the employer must determine the taxable value of the benefit (using either the operating cost or statutory formula method), lodge an FBT return, pay the FBT due, and report the benefit on the employee’s income statement.

Please do not hesitate to contact us if you have any queries in relation to your tax and accounting matters.