Australian Medicare Levy Calculator
Work out your Medicare levy for 2026-27 — the 2% levy, low-income reductions, and Medicare levy surcharge computed with ATO thresholds.
AU Medicare Levy Calculator
2025–26 ATO rates · levy + surcharge (MLS)
Medicare Summary
SINGLEYour Medicare summary
A plain-English read of your Medicare position — the 2% levy with any low-income reduction, and the surcharge (MLS) where income exceeds the threshold and no appropriate full-year private hospital cover is held. Figures use ATO 2025–26 rates.
Medicare cost across income levels
Estimated Medicare levy plus surcharge at different taxable incomes, using your current household status and cover settings. The surcharge only applies where no appropriate full-year private hospital cover is held and income exceeds the relevant threshold.
| Taxable Income | Medicare Levy | Surcharge (MLS) | Total | Effective Rate |
|---|
Low-income reduction thresholds
No Medicare levy is payable at or below the lower threshold. Between the lower and upper thresholds the levy phases in at 10 cents per dollar above the lower threshold. Source: ATO myTax 2026 — Medicare Levy Reduction ↗
| Category | Lower (nil levy) | Upper (full 2%) |
|---|---|---|
| Single — standard | AUD 28,011 | AUD 35,013 |
| Single — seniors / pensioner (SAPTO) | AUD 44,268 | AUD 55,335 |
| Family — standard | AUD 47,238 | AUD 59,047 |
| Family — seniors / pensioner (SAPTO) | AUD 61,623 | AUD 77,028 |
Medicare levy surcharge tiers
The surcharge is a separate charge of 1% to 1.5% on top of the 2% levy. It applies to higher-income earners who do not hold an appropriate level of private hospital cover. Source: ATO MLS Thresholds ↗
| Tier | Single income band | Surcharge |
|---|---|---|
| Base tier | AUD 105,000 or less | 0% |
| Tier 1 | AUD 105,001 – AUD 123,000 | 1% |
| Tier 2 | AUD 123,001 – AUD 164,000 | 1.25% |
| Tier 3 | AUD 164,001 or more | 1.5% |
How the Medicare Levy Works in Australia
A reference guide to the 2% Medicare levy and the Medicare levy surcharge (MLS) — who pays, who is reduced or exempt, and how the levy differs from the surcharge. All figures verified against official ATO guidance.
The Medicare Levy at a Glance
The Medicare levy helps fund Australia's public health system. Most Australian residents for tax purposes pay a levy of 2% of their taxable income, collected through PAYG withholding during the year and reconciled when a tax return is lodged. The levy is in addition to income tax.
Lower-income earners may pay a reduced levy or none at all. For 2025–26, a single person pays no levy where taxable income is at or below AUD 28,011, with the levy phasing in between that lower threshold and the upper threshold of AUD 35,013. Higher thresholds apply to seniors and pensioners and to families.
A separate charge — the Medicare levy surcharge (MLS) — applies to higher-income earners who do not hold an appropriate level of private hospital cover. It ranges from 1% to 1.5% and is calculated on income for MLS purposes.
Common Medicare Levy Scenarios
How the levy and surcharge generally apply in everyday situations. Treatment can vary with individual circumstances — these are general descriptions only.
Standard earner
A resident earning above the low-income threshold pays the full 2% levy on taxable income. At AUD 90,000 that is AUD 1,800. No surcharge applies if income is below the MLS threshold or appropriate full-year hospital cover is held.
Low-income earner
Where taxable income is at or below the lower threshold, no levy is payable. Between the lower and upper thresholds the levy phases in at 10 cents per dollar above the lower threshold, so it is less than the full 2%.
High earner, no cover
A single earning above AUD 101,000 (2025–26) without appropriate private hospital cover pays the surcharge on top of the 2% levy. The rate is 1% to 1.5% depending on which income tier applies.
Family
Families are tested against higher thresholds. The family low-income threshold rises with each dependent child, and the family MLS threshold (double the single figure) increases by AUD 1,500 for each child after the first.
Key Medicare Comparisons
How the levy, the surcharge, and the available concessions differ — and why the distinction changes what you pay.
Medicare Levy vs Medicare Levy Surcharge
| Factor | Medicare Levy | Medicare Levy Surcharge (MLS) |
|---|---|---|
| Who it applies to | Most resident taxpayers | Higher earners without appropriate hospital cover |
| Rate | 2% of taxable income | 1%, 1.25% or 1.5% by income tier |
| Can you avoid it? | Only via reduction or exemption | No surcharge applies where appropriate private hospital cover is held |
| Income tested on | Taxable income | Income for MLS purposes (broader) |
| 2025–26 trigger (single) | Above AUD 28,011 (phases in) | Above AUD 101,000 (without cover) |
Reduction vs Exemption
| Factor | Low-income reduction | Exemption |
|---|---|---|
| Based on | Taxable income vs thresholds | Personal circumstances (e.g. medical, residency) |
| Effect | Levy phased in / reduced to nil | Full or half levy not payable for eligible days |
| How applied | Calculated automatically on lodgement | Claimed on the tax return, may need documentation |
| Typical examples | Part-time, casual, pensioners, students | Foreign residents, certain visa holders, medical |
Single vs Family Thresholds (2025–26)
| Measure | Single | Family |
|---|---|---|
| Low-income lower threshold | AUD 28,011 | AUD 47,238 (+AUD 4,338 / child) |
| SAPTO lower threshold | AUD 44,268 | AUD 61,623 (+AUD 4,338 / child) |
| MLS base tier ceiling | AUD 101,000 | AUD 202,000 (+AUD 1,500 / child after first) |
| MLS top tier (1.5%) | Above AUD 158,000 | Above AUD 316,000 |
Worked Examples
Illustrative scenarios using 2025–26 figures. Examples are for illustration only and do not reflect any individual's circumstances.
Australian Medicare Levy Snapshot
How the 2% levy and the surcharge build across income levels
ATO rates & thresholds · 2025–26Medicare Cost Analysis
Single resident, no private hospital cover
Levy vs Surcharge
Components of Medicare cost by income (no cover)
Sample Breakdown
Single on AUD 130,000 with no hospital cover
Effective Medicare Rate
Levy + surcharge as a % of income (no cover)
| Taxable Income | Medicare Levy | Surcharge (no cover) | Total | Effective Rate |
|---|
Australian Medicare Levy News & Updates
Recent ATO, Treasury and Department of Health changes affecting the Medicare levy, the surcharge, and private health thresholds — sourced from official government channels.
Medicare Levy Low-Income Thresholds Increased for 2025–26
The Medicare levy low-income thresholds increased for the 2025–26 income year (applying from 1 July 2025). The higher thresholds reduce or remove the levy for more lower-income earners, with larger thresholds again for seniors, pensioners, and families.
Key Changes (2025–26 vs 2024–25)
- Single threshold rises from AUD 27,222 to AUD 28,011
- Family threshold rises from AUD 45,907 to AUD 47,238
- Single seniors and pensioners from AUD 43,020 to AUD 44,268
- Family seniors and pensioners from AUD 59,886 to AUD 61,623
- Per dependent child or student increment rises from AUD 4,216 to AUD 4,338
Impact
More low-income earners pay no levy or a reduced levy, with the levy phasing in at 10 cents per dollar above the lower threshold.
What to Watch
The thresholds are confirmed in the ATO myTax 2026 instructions and are reviewed each income year.
Legislated Tax Cut: 16% Rate Falls to 15% — Levy Stays at 2%
Previously legislated personal income tax cuts take effect from 1 July 2026, reducing the marginal rate on income between AUD 18,201 and AUD 45,000. The Medicare levy itself is unchanged and remains at 2%.
Key Changes
- From 1 July 2026, the 16% rate is reduced to 15%
- From 1 July 2027, that rate is reduced further to 14%
- SAPTO thresholds change from 2026–27 as a result of the cuts
- The 2% Medicare levy and the surcharge structure are not affected
Impact
Take-home pay rises for taxpayers above AUD 45,000, but the Medicare levy continues to be calculated separately at 2%.
What to Watch
PAYG withholding schedules update for the 2026–27 year; the levy line on assessments is unchanged.
Surcharge & Private Health Thresholds Increased for 2025–26
The income thresholds used for the Medicare levy surcharge and the private health insurance rebate increased from 1 July 2025. The single base-tier ceiling rose to AUD 101,000, with the family thresholds set at double the single figures.
Key Changes (single)
- Base tier ceiling rises from AUD 97,000 to AUD 101,000 (no surcharge)
- Tier 1 (1%): AUD 101,001 – 118,000
- Tier 2 (1.25%): AUD 118,001 – 158,000
- Tier 3 (1.5%): AUD 158,001 or more
- Family thresholds are double, plus AUD 1,500 per child after the first
Impact
Slightly fewer people are caught by the surcharge at the margin, and the rebate income tiers shift in line.
What to Watch
Holding appropriate full-year private hospital cover removes the surcharge regardless of income.
Medicare Levy — Frequently Asked Questions
Common questions about the 2% Medicare levy, the low-income reduction, exemptions, and the Medicare levy surcharge — verified against official ATO guidance.
The Medicare levy helps fund Australia’s public health system. Most Australian residents for tax purposes pay a levy of 2% of their taxable income, in addition to income tax. It is generally collected through PAYG withholding during the year and reconciled when you lodge your tax return.
ATO Medicare LevyThe standard rate is 2% of taxable income. For example, on a taxable income of AUD 90,000 the levy is AUD 1,800. Low-income earners may pay a reduced levy or none at all.
ATO Medicare LevyNo — they are separate. The Medicare levy is 2% and applies to most residents. The Medicare levy surcharge (MLS) is an extra 1% to 1.5% that applies only to higher-income earners who do not hold an appropriate level of private hospital cover. On a notice of assessment they may appear together as “Medicare levy and surcharge”.
ATO Medicare Levy SurchargeIt is calculated separately and added on top of your income tax. Income tax uses the marginal tax brackets; the Medicare levy is a flat 2% of taxable income (subject to the low-income reduction).
ATO Medicare LevyFor employees, it is generally included in PAYG withholding taken from each pay. The exact amount is worked out when you lodge your tax return, and any difference is settled as part of your assessment.
ATO Medicare LevyFor 2025–26, a single person pays no levy if taxable income is at or below AUD 28,011. Between AUD 28,011 and the upper threshold of AUD 35,013 the levy phases in, and the full 2% applies above that.
ATO myTax 2026 — Levy ReductionBetween the lower and upper thresholds, the levy is reduced. It phases in at 10 cents per dollar of income above the lower threshold. For example, a single on AUD 31,000 in 2025–26 pays (31,000 − 28,011) × 10% = AUD 298.90, instead of the full 2%.
ATO myTax 2026 — Levy ReductionFamilies are tested on combined family income. For 2025–26 the family lower threshold is AUD 47,238, increased by AUD 4,338 for each dependent child or student. Seniors and pensioner families have a higher threshold of AUD 61,623. The ATO works out the exact family reduction, apportioned between spouses, on lodgement.
ATO Family ReductionEligible seniors and pensioners (entitled to the seniors and pensioners tax offset, SAPTO) have higher low-income thresholds. For 2025–26 a single senior pays no levy at or below AUD 44,268, with the levy phasing in up to AUD 55,335.
ATO myTax 2026 — Levy ReductionYes. Separate from the low-income reduction, a full or half exemption can apply if you meet certain conditions — for example you were a foreign resident, you were not entitled to Medicare benefits, or you met specific medical requirements. Exemptions are claimed on your tax return and may require documentation.
ATO Medicare Levy ExemptionPeople who are foreign residents for the full income year, or who are not entitled to Medicare benefits, may be exempt. An exemption is claimed on the tax return, and certain visa holders may need a Medicare Entitlement Statement to support a claim.
ATO Medicare Levy ExemptionThe surcharge is an additional 1% to 1.5% charged on top of the 2% levy. It applies to higher-income earners who do not hold an appropriate level of private hospital cover, and is designed to encourage people to take out private cover.
ATO Medicare Levy SurchargeFor a single person, the surcharge can apply where income for MLS purposes is above AUD 101,000 and no appropriate hospital cover is held. The rate is 1% (AUD 101,001–118,000), 1.25% (AUD 118,001–158,000), or 1.5% (above AUD 158,000). Family thresholds are double these figures.
ATO MLS ThresholdsThe surcharge does not apply where an appropriate level of private hospital cover is held for the full financial year. An appropriate policy has an excess of AUD 750 or less for singles and AUD 1,500 or less for couples and families. General (extras) cover alone does not count as hospital cover for this purpose.
ATO Medicare Levy SurchargeIncome for MLS purposes is broader than taxable income. It also includes reportable fringe benefits, total net investment losses, and reportable super contributions. If you have a spouse, your combined income is used.
ATO MLS IncomeFamilies are tested against the family thresholds (double the single figures), increased by AUD 1,500 for each dependent child after the first. Each spouse then pays the surcharge on their own income at the rate set by the family income tier.
ATO MLS ThresholdsThe surcharge generally applies only for the days you did not have appropriate cover. Your health insurer’s statement shows the number of days you and any dependants held the relevant cover, and the surcharge is calculated on a pro-rata basis.
ATO Medicare Levy SurchargeFor families, generally you, your spouse and all your dependants need appropriate hospital cover to avoid the surcharge. If any of you is not covered and family income is above the threshold, the surcharge can apply unless an exemption applies.
ATO Medicare Levy SurchargeYes. The Australian Government rebate on private health insurance is income-tested using the same income tiers as the surcharge. Higher earners receive a smaller rebate, and the rebate can be claimed as a reduced premium or as a tax offset.
privatehealth.gov.auNo. The legislated reduction of the 16% marginal rate to 15% from 1 July 2026 changes income tax only. The Medicare levy remains at 2%, and the surcharge structure is unaffected.
ATO New Tax CutsImportant Disclaimer
For educational and informational purposes only. This calculator produces estimates of the Medicare levy and the Medicare levy surcharge based on the inputs provided and the ATO rates and thresholds for the selected financial year. For 2025–26 it applies the 2% Medicare levy, the low-income reduction (with the 10-cent-per-dollar shade-in), the seniors and pensioners thresholds, the family thresholds, and the four Medicare levy surcharge income tiers. The calculator simplifies many aspects of the levy and does not capture every offset, exemption, or individual circumstance.
Not a complete picture of your Medicare position. Family Medicare levy reductions are apportioned between spouses by the ATO on lodgement, and the family figure shown here is an estimate based on combined income. Income for surcharge purposes can be broader than taxable income — it also includes reportable fringe benefits, total net investment losses, and reportable super contributions, which this estimate does not include. Partial-year private hospital cover is pro-rated by the days without cover, and exemptions claimed on medical or residency grounds are not modelled here.
No warranty of accuracy. While Money Snap takes reasonable care to source figures from official authorities (ATO, ASIC MoneySmart), this calculator is provided “as is” without any express or implied warranty as to accuracy, completeness, timeliness, or fitness for any particular purpose. Rates, thresholds, and rules change — figures shown may be out of date, and individual circumstances not captured by the inputs may materially affect actual amounts payable.
Not financial advice. Information provided is general in nature only and does not take into account your personal objectives, financial situation, or needs. Results do not constitute financial, tax, or legal advice and use of this calculator does not create an advisory relationship. Before acting on any figure shown, obtain personal advice from a registered tax agent (Tax Practitioners Board) or a licensed financial adviser, or refer to the ATO directly.
Limitation of liability. To the maximum extent permitted by law, Money Snap accepts no liability for any loss, damage, cost, or expense — direct or indirect — arising from reliance on this calculator or the information it produces. Users are responsible for verifying all figures with the relevant authority before relying on them. Use of this calculator is subject to our Terms of Use.
Official data sources
Data source: ATO — Medicare levy, myTax 2026 low-income reduction thresholds, and MLS thresholds & rates (2025–26). Figures are estimates for a single resident using taxable income only.