Medicare Levy Calculator
Work out your 2% Medicare levy and any Medicare levy surcharge for 2026-27, using the single or family thresholds and your hospital cover status.
- The levy and the surcharge are separate charges. Hospital cover removes the surcharge but never the 2% levy.
- The family threshold rises by $1,500 for each MLS dependent child after the first (not modelled above).
| Charge | Rate | Amount |
|---|---|---|
| Medicare levy | 2.00% | $1,900 |
| Medicare levy surcharge | 0.00% | $0 |
| Total per year | $1,900 |
Estimate for a resident with cover status held the full year. The levy phases in at low incomes, which the calculation above includes. Family low-income reductions are not modelled.
Levy and surcharge are two different charges
The Medicare levy is 2% of taxable income and most residents pay it whatever insurance they hold: on $90,000 it is $1,800 for 2026-27. The Medicare levy surcharge (MLS) is a separate charge of 1% to 1.5% that only applies when your income for MLS purposes is above $105,000 as a single or $210,000 as a family and you do not hold private patient hospital cover. This page is one of our PAYG and tax calculators; the tool above handles both charges at once.
Low earners do not pay the full levy. It is nil below a low-income threshold, then phases in at 10 cents per extra dollar until the full 2% takes over, and the calculator applies that shade-in automatically. The exemption categories, reductions and history are covered in our guide to the Medicare levy.
A worked contrast: a single earner on $130,000 with no hospital cover sits in Tier 2 and pays a $1,625 surcharge on top of the $2,600 levy. Taking out hospital cover removes the $1,625 but never the levy itself.
Medicare levy surcharge thresholds 2026-27
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single | $105,000 or less | to $123,000 | to $164,000 | over $164,000 |
| Family | $210,000 or less | to $246,000 | to $328,000 | over $328,000 |
| Surcharge rate | 0% | 1% | 1.25% | 1.5% |
The family threshold rises by $1,500 for each MLS dependent child after the first. The test uses income for MLS purposes, which starts at taxable income and adds back several other amounts; the full definition sits on the ATO threshold page linked in Sources below.
Both charges ride on top of ordinary income tax under the 2026-27 tax brackets. Standard PAYG withholding already builds the 2% levy into what comes out of each pay, which is why the levy rarely surprises anyone at tax time while the surcharge often does. You can see the combined per-pay amounts in the ATO tax tables.
Who does not pay the levy
Levy does not apply, or is reduced
- Foreign residents for tax purposes pay no Medicare levy
- People in an exemption category, such as some defence force members and anyone not entitled to Medicare benefits, can claim a full or half exemption
- Low-income earners pay a reduced levy or none through the phase-in
Still payable, commonly misunderstood
- Private health insurance never removes the 2% levy, only the surcharge
- The levy applies to taxable income, so investment income is included
- Exemptions must be claimed in your return, some with a Medicare Entitlement Statement
To see how the levy lands inside your total withholding across the year, run your salary through the PAYG calculator.
Frequently asked questions
Who pays the Medicare levy?
What is the Medicare levy surcharge?
How do I avoid the Medicare levy surcharge?
Does private health insurance remove the 2% Medicare levy?
Is the surcharge worked out on my income or the household income?
Is the Medicare levy already in the tax tables and calculators?
What income counts for the surcharge test?
Sources
Narelle Hartigan is a CPA-qualified tax accountant with over a decade of experience in Australian personal taxation and payroll. She founded PAYG Calculator Australia to make tax withholding easy for every Australian worker to understand.