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Calculate your Medicare levy (2%) and Medicare Levy Surcharge (1–1.5%) — with correct, separately-modelled singles and family thresholds for both.
Updated: 5 August 2026 · Reviewed by Mohsin Iqbal · 14 min read
📌 Threshold Summary (2026–27)
Medicare Levy rate: 2%
Individual threshold: $28,011–$35,013
Family threshold: from $47,238
MLS starts (single): $105,000
MLS starts (family): $210,000
Family MLS: +$1,500 per child after the first
Taxable Income → Resident? → Low-Income Threshold? → Medicare Levy
→ Private Hospital Cover? → MLS Applies? → Total Medicare Charges
Your Details
Financial year
Taxable income
$
Family status
Spouse's taxable income
$
Number of dependent children
kids
Private hospital cover (PHI)?
Medicare exemption
Medicare Levy Result
Medicare Levy
—
MLS
—
Total
—
Total Medicare Levy + MLS
—
Component
Amount
Rate
Estimates only, for planning purposes — not financial or tax advice. Confirm your exact liability via ATO myTax or a registered tax agent.
⏱️ Last reviewed: 5 August 2026 · Written and reviewed by Mohsin Iqbal under our editorial policy and calculation methodology. Tax rules change — always check your own circumstances against current ATO guidance.
📖 Approx. 14 min read💰 2026–27 & 2025–26 ATO rates🔄 Updated 5 August 2026
The Medicare levy is 2% of taxable income for most residents, with a low-income shade-in below $35,013 (individual).
The Medicare Levy Surcharge (MLS) is a completely separate, additional charge (1–1.5%) for higher earners without private hospital cover.
Family thresholds for the levy and the surcharge are entirely different numbers — a common source of confusion this calculator gets right.
For singles in 2026–27, MLS starts at $105,000 (up from $101,000 in 2025–26).
Family MLS thresholds are exactly double the singles thresholds, plus $1,500 for each dependent child after the first.
Quick Answer
Most Australian residents pay a 2% Medicare levy on their taxable income, calculated automatically as part of their tax return. If you earn above the relevant threshold and don't hold private hospital cover, you may also pay the separate Medicare Levy Surcharge (1–1.5%). Someone earning $100,000 with private hospital cover pays $2,000 in Medicare levy and $0 MLS; without cover, the same income is still below the MLS threshold, so MLS still wouldn't apply — MLS only bites above $105,000 (2026–27, singles). Use the calculator above for your exact figure.
What Is the Medicare Levy?
The Medicare levy is a 2% tax on taxable income paid by most Australian residents as part of their income tax. It partially funds Medicare — Australia's public health insurance system providing subsidised medical services, hospital treatment, and the Pharmaceutical Benefits Scheme (PBS). From 1 July 2019, the rate increased from 1.5% to 2%, with the extra 0.5% specifically designated to help fund the National Disability Insurance Scheme (NDIS).
The levy is automatically calculated when you lodge your tax return and appears on your Notice of Assessment — it isn't optional, though low-income earners receive a full or partial reduction. For example, someone earning $85,000 in 2026–27 pays approximately $16,020 in income tax plus $1,700 in Medicare levy.
Medicare Levy vs Medicare Levy Surcharge — Different Things
These two charges share a name but are calculated completely differently, using entirely different thresholds:
Feature
Medicare Levy (ML)
Medicare Levy Surcharge (MLS)
Who pays it
Almost all Australian residents
Only higher-income earners without private hospital cover
Rate
2% of taxable income
1%, 1.25%, or 1.5% depending on income
Individual threshold (2026–27)
$28,011–$35,013 shade-in
$105,000
How to avoid it
Cannot be avoided (only low-income reduction/exemption)
Hold qualifying private hospital cover
Purpose
Contributes to Medicare funding
Incentivises private health insurance uptake
Medicare Levy Low-Income Thresholds
For individuals, the current ATO thresholds are:
Taxable Income
Medicare Levy
At or below $28,011
Nil
$28,012 – $35,013 (shade-in)
10 cents for every dollar above $28,011
Above $35,013
Full 2% of taxable income
⚠️ The ATO's own published guidance notes these figures for the 2025–26 year were announced in the 2026–27 Federal Budget and are not yet law as of this page's last review, though the ATO is using them as its current reference point for both years. If you're finalising a 2025–26 return, confirm the current status with a registered tax agent.
Family Thresholds — Two Different Numbers
This is where confusion (and calculator errors) commonly happen: the Medicare Levy's own family reduction threshold and the Medicare Levy Surcharge's family threshold are completely different figures, for different purposes. Mixing them up — as some calculators do — produces meaningfully wrong results.
Medicare Levy (low-income reduction)
Medicare Levy Surcharge
Purpose
Reduces/removes the levy for lower-income families
Determines if the surcharge applies to higher earners
Base threshold
$47,238 (lower), $59,047 (upper)
$210,000 (2026–27) / $202,000 (2025–26)
Per-child adjustment
+$4,338 (lower), +$5,423 (upper) per child
+$1,500 per child after the first
Tested against
Combined family taxable income
Combined family income for MLS purposes
✅ This calculator correctly models both thresholds separately — toggle "Family / couple" above to see them applied to your own numbers.
Medicare Levy Surcharge Thresholds
The MLS applies when your income exceeds the threshold and you don't hold qualifying private hospital cover.
Income (Singles, 2026–27)
MLS Rate
Up to $105,000
Nil
$105,001 – $123,000
1.0%
$123,001 – $164,000
1.25%
$164,001+
1.5%
Family MLS thresholds are exactly double the singles thresholds ($210,000 / $246,000 / $328,000 for 2026–27), plus $1,500 for each dependent child after the first. At incomes moderately above the threshold, a basic private hospital policy is often cheaper than the surcharge — effectively making insurance "free" in net terms once you factor in the MLS you'd otherwise pay.
Do I Need Private Hospital Cover?
A quick way to see the financial impact of the decision, for a single person in 2026–27:
Income
No PHI
With PHI
$110,000
$1,100 MLS payable
No MLS
$150,000
$1,875 MLS payable
No MLS
Compare the MLS you'd pay against an actual quote for basic hospital cover — if the policy costs less than the MLS, taking out cover is the cheaper option purely on the numbers, before even considering the value of having private cover itself.
Who Is Exempt from the Medicare Levy?
Low-income earners below the individual or family threshold.
Foreign residents not entitled to Medicare benefits are generally exempt.
Certain visa holders, depending on visa category and any reciprocal health agreement between Australia and their home country.
Some government pension and benefit recipients at low income levels.
Exemptions are claimed on your tax return — the calculator above lets you model a full or half exemption directly.
Salary and the Medicare Levy
Your employer withholds an estimate of your Medicare levy through PAYG withholding, alongside income tax, based on the information in your Tax File Number declaration. If you're eligible for a reduction or exemption but your employer isn't withholding accordingly, you'll receive the adjustment when you lodge your tax return. Salary sacrifice reduces your taxable income, which can also reduce your Medicare levy — see our Income Tax Calculator to model this alongside your full tax position.
Tax Return and the Medicare Levy
The Medicare levy (and any MLS) is calculated automatically as part of your tax return assessment — you don't need to calculate it separately when lodging via myTax. It's combined with your income tax and any HELP repayment into your total tax liability, which is then compared against tax already withheld to determine your refund or amount owing. See our Tax Return Calculator for a complete refund estimate including the Medicare levy.
Who Benefits from This Calculator?
Employees checking their Medicare levy and any MLS impact before or after a pay rise.
Contractors and sole traders estimating their full tax position, including the Medicare levy on business profit.
Families navigating the separate, higher family thresholds for both the levy and the surcharge.
Retirees checking their position, noting SAPTO-eligible taxpayers have different, higher thresholds not modelled directly here.
Students working part-time who want to confirm whether they're below the low-income threshold.
Investors factoring investment income into their total taxable income and MLS exposure.
Worked Examples
Scenario
Medicare Levy
MLS
Total
Single, $100,000, with PHI
$2,000
$0
$2,000
Single, $110,000, no PHI
$2,200
$1,100 (1% tier)
$3,300
Family, combined $180,000, 0 kids, no PHI
Applies per individual
$0 (below $210,000 family threshold)
Levy only
Family, combined $45,000, 0 kids
$0 (below $47,238 family threshold)
$0
$0
Common Mistakes
Confusing the Medicare levy family threshold with the MLS family threshold. They're different figures for different purposes — mixing them up produces meaningfully wrong results.
Assuming Medicare levy and MLS are the same thing. They're separate charges with separate thresholds and separate purposes.
Forgetting extras-only cover doesn't count for MLS purposes. You need hospital cover specifically — dental, optical and similar extras policies don't exempt you from the MLS.
Not accounting for partial-year cover. If your private hospital cover only applied for part of the year, MLS may still apply for the uncovered days.
Using outdated thresholds. MLS thresholds have moved from $93,000 in earlier years to $101,000 (2025–26) to $105,000 (2026–27) — always check which year applies.
Frequently Asked Questions
A 2% tax on taxable income paid by most Australian residents, partly funding Medicare and the NDIS. It's calculated automatically as part of your tax return, separate from income tax.
2% of your taxable income, with a shade-in reduction for individuals between $28,011 and $35,013, and no levy below $28,011. Family thresholds use different, higher figures. Use the calculator above for your exact amount.
Most Australian resident taxpayers earning above the low-income threshold. Foreign residents, some visa holders, and low-income earners may be exempt or receive a reduction.
Low-income earners below the relevant threshold, foreign residents not entitled to Medicare benefits, certain visa holders under reciprocal health agreements, and some pension recipients at low income levels.
For individuals, no levy applies at or below $28,011, with a reduced levy up to $35,013 and the full 2% above that. Family thresholds are separate and higher, starting from $47,238, increasing per dependent child.
2% of your taxable income for most residents above the threshold — for example, $2,000 on a $100,000 taxable income. Below the threshold it's reduced or nil.
Yes, completely. The Medicare Levy is paid by almost all residents at 2%. The Medicare Levy Surcharge is an additional, separate charge (1–1.5%) only for higher earners without private hospital cover, with its own much higher thresholds.
Yes, if you qualify — for example, as a foreign resident, certain visa holder, or low-income earner. Exemptions and reductions are claimed as part of your tax return.
If a student is an Australian resident earning above the low-income threshold, yes — the same rules apply regardless of student status. Below the threshold, the same low-income reduction or exemption applies as for anyone else.
Pensioners may be entitled to higher thresholds via the Seniors and Pensioners Tax Offset (SAPTO), meaning many pay reduced or no Medicare levy. Eligibility depends on individual circumstances — the calculator above uses standard thresholds, not SAPTO-adjusted ones.
Yes — salary sacrifice reduces your taxable income, which reduces the Medicare levy calculated on it, in addition to reducing your income tax.
Yes — investment income like interest, dividends and rental income forms part of your taxable income, which the Medicare levy is calculated on, the same as salary income.
It's calculated automatically by the ATO based on your taxable income and family circumstances when you lodge — you don't need to calculate or report it separately. It appears as a line item on your Notice of Assessment.
You need hospital cover (sometimes called bronze or silver hospital) from a registered private health insurer, held for the full income year. Extras-only cover (dental, optical, etc.) doesn't exempt you from the MLS.
Partly — from 1 July 2019, the rate increased from 1.5% to 2%, with the extra 0.5% specifically designated to help fund the National Disability Insurance Scheme.
Not necessarily. MLS liability is based on the number of days you actually held qualifying hospital cover during the income year, not simply whether you have cover at year end. If you took out cover partway through the year, you may still owe a pro-rated MLS for the days you weren't covered.
The Medicare levy (2%) and Medicare Levy Surcharge (1–1.5%) are separate charges with separate thresholds — for both individuals and families. Use the calculator above with your own income, family status, dependent children and private hospital cover status for an accurate, correctly-separated estimate of both.