Medicare levy estimate
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| 2026–27 single income | MLS rate |
|---|---|
| $105,000 or less | 0% |
| $105,001 – $123,000 | 1% |
| $123,001 – $164,000 | 1.25% |
| $164,001 or more | 1.5% |
What is the Medicare levy?
The Medicare levy helps fund Australia’s public health system. For many Australian resident taxpayers, the standard levy is 2% of taxable income. The levy is generally calculated separately from income tax, so seeing your income-tax bracket alone does not tell you the full amount payable.
A reduced levy or exemption may apply in some circumstances, including where income is below the relevant low-income threshold or a person meets particular eligibility criteria. The estimate here applies a simplified single-person threshold and does not assess family thresholds, dependants, senior or pensioner offsets, exemption categories or all adjustment rules.
What is the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is an additional charge that may apply to higher-income individuals and families who do not hold an appropriate level of private patient hospital cover for the relevant period. It is separate from the standard Medicare levy. Extras-only insurance does not generally count as hospital cover for MLS purposes.
For 2026–27, the single thresholds shown in the table use a base tier at $105,000, followed by higher tiers at $123,000 and $164,000. The corresponding surcharge rates are 1%, 1.25% and 1.5%. Family thresholds are generally higher and can increase for dependent children. The calculator provides an indicative single-income estimate and cannot determine your exact MLS income.
How cover and income affect the estimate
The MLS uses income for surcharge purposes, which can differ from taxable income. It may include reportable fringe benefits, net investment losses and other amounts in addition to taxable income. The ATO also considers your circumstances and the number of days you and your dependants had appropriate cover.
The calculator asks whether you have private hospital cover and applies the simplified income thresholds to the annual income entered. If your cover began or ended during the year, you had a spouse, or your income includes reportable fringe benefits or other adjustments, the real calculation may be different.
How to reduce or avoid the surcharge
If you are approaching an MLS threshold, compare the cost and benefits of appropriate hospital cover with the potential surcharge. Consider the policy excess, waiting periods, exclusions, level of hospital cover and whether the policy is appropriate for everyone who needs to be covered. A policy that does not meet the relevant requirements may not prevent an MLS liability.
Do not take out insurance solely on the assumption that it will save money. Compare premiums and the surcharge that could apply, and consider health needs and policy terms. The comparison links on this site may earn a commission; this does not affect the calculator output.
Check the rules for your tax return
Your Medicare levy and surcharge are assessed as part of your tax return. Review the ATO guidance for the income year, including the definitions of income for MLS purposes and any exemption or reduction eligibility. Keep evidence of hospital cover and dates if you need to answer questions in your return.
This page is general information, not personal tax or health insurance advice. Use the calculator as an early estimate and verify details against your ATO records or with a registered tax agent. Rates verified October 2026 from ato.gov.au.
Families, cover periods and MLS income
The surcharge is not always assessed using one person’s salary alone. A family threshold may apply to couples and families, with adjustments for dependent children. The surcharge can also depend on the portion of the financial year that appropriate hospital cover was not held. A simplified annual-income estimate cannot calculate those details without additional information.
The ATO’s income definition for MLS may include reportable fringe benefits, total net investment losses and other components. If you share a policy with a spouse or dependants, check that each person who needs to be covered is included for the relevant dates. Compare your policy statements with the ATO return labels and seek advice when your circumstances do not fit a simple single-income estimate.
Frequently asked questions
Is the Medicare levy the same as the Medicare Levy Surcharge?
No. The Medicare levy generally applies to resident taxpayers, while the additional surcharge may apply to higher-income people without appropriate private hospital cover.
Does extras-only cover avoid the surcharge?
Generally, extras-only cover is not the appropriate hospital cover used to avoid the Medicare Levy Surcharge. Check current ATO rules and policy details.
Are family thresholds different?
Yes. Family thresholds are generally higher and can increase with dependent children. This simplified calculator estimates single thresholds only.