The Medicare Levy Surcharge (MLS) applies to Australian taxpayers who do not have an appropriate level of private hospital cover for themselves and all their dependants and earn over a certain income each year.
The MLS is calculated based on your annual 'income for Medicare Levy Surcharge purposes' which includes things like taxable income, exempt foreign employment income, reportable fringe benefits, reportable super contributions and total net investment losses.
Find out more about the MLS at the ATO website.