Medicare Levy Surcharge Calculator
Find your MLS tier and what the surcharge costs without private hospital cover, for the 2025-26 return you lodge now or for 2026-27. Single and family thresholds, investment losses and part-year cover included.
| 2026-27 single tiers | Income for MLS purposes | Rate |
|---|---|---|
| Base tier | $105,000 or less | 0% |
| Tier 1 | $105,001 to $123,000 | 1% |
| Tier 2 | $123,001 to $164,000 | 1.25% |
| Tier 3 | $164,001 or more | 1.5% |
Crossing into Tier 1 charges 1% on all $115,000, which is $1,150 for a full year without cover. Compare that with the annual premium for a basic hospital policy.
The tier is set by income for MLS purposes, which adds back fringe benefits, investment losses and reportable super. The rate is then charged on taxable income plus reportable fringe benefits. The surcharge is separate from, and on top of, the 2% Medicare levy.
How is the Medicare levy surcharge calculated?
The surcharge is an income-tested charge on people who earn above the thresholds and do not hold an appropriate level of private patient hospital cover. It sits on top of the 2% Medicare levy and is worked out when your return is assessed.
- Work out your income for MLS purposes. Start from taxable income and add reportable fringe benefits, total net investment losses and reportable super contributions. Families add the spouse’s figure too.
- Pick the single or family thresholds. A spouse or a dependent child puts you on the family thresholds. Each dependent child after the first lifts every family tier by $1,500.
- Find your tier. For 2026-27 a single person with income for MLS purposes of $105,000 or less pays nothing. Above that the rate is 1%, 1.25% or 1.5% depending on the tier.
- Apply the rate to the whole amount. The rate is charged on taxable income plus reportable fringe benefits, not only the part above the threshold. At $105,001 that is $1,050.
- Scale it for days without hospital cover. If you held appropriate private hospital cover for part of the year, the surcharge applies only to the days you did not. 219 days of cover on $130,000 cuts $1,625 to $650.
What are the MLS thresholds for 2026-27 and 2025-26?
The tiers are indexed each year. For 2026-27 the single base tier ends at $105,000, up from $101,000 in 2025-26. Use the 2025-26 table for the return you are lodging now and the 2026-27 table for the year under way.
| 2026-27 | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single | $105,000 or less | $105,001 to $123,000 | $123,001 to $164,000 | $164,001 or more |
| Family | $210,000 or less | $210,001 to $246,000 | $246,001 to $328,000 | $328,001 or more |
| Surcharge rate | 0% | 1% | 1.25% | 1.5% |
| 2025-26 | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single | $101,000 or less | $101,001 to $118,000 | $118,001 to $158,000 | $158,001 or more |
| Family | $202,000 or less | $202,001 to $236,000 | $236,001 to $316,000 | $316,001 or more |
| Surcharge rate | 0% | 1% | 1.25% | 1.5% |
The family thresholds rise by $1,500 for each MLS dependent child after the first. A family with three dependent children has a 2026-27 base tier ending at $213,000 rather than $210,000.
Is the surcharge charged on my whole income?
Yes, and that is the part that catches people. Unlike income tax, which only taxes each slice at its own rate, the surcharge rate applies to your whole taxable income plus reportable fringe benefits once you cross a tier. There is no phase-in.
In 2026-27 a single person on $105,000 pays no surcharge. One dollar more, at $105,001, costs $1,050 for a full year without hospital cover. The same jump happens at each tier boundary as the rate steps from 1% to 1.25% and then 1.5%.
That makes the comparison simple: the surcharge you would pay against the yearly premium of a basic hospital policy that meets the rules. Near a threshold, check whether a pay rise, a bonus or a salary sacrifice arrangement tips you over, keeping in mind that salary sacrificed to super is added back for this test.
What counts as income for MLS purposes?
More than your taxable income. The tier test adds back amounts that reduce taxable income or sit outside it:
- Taxable income, the starting point.
- Reportable fringe benefits from your income statement. See reportable fringe benefits.
- Total net investment losses, from rental property and financial investments. Negative gearing does not shelter you here.
- Reportable super contributions: salary sacrificed to super and personal contributions you claim a deduction for.
The ATO's own example for 2026-27 shows why this matters. A single person on $90,000 of taxable income with $27,000 of reportable fringe benefits has $117,000 of income for MLS purposes, which puts them in Tier 1 even though the salary alone sits well under the threshold. Without hospital cover the surcharge is $1,170.
Investment losses and salary-sacrificed super count towards the tier test, but the rate itself is charged on taxable income plus reportable fringe benefits. So $98,000 of taxable income with a $12,000 rental loss tests at $110,000 and is surcharged at 1% of $98,000: $980.
How does the surcharge work for couples and families?
If you have a spouse or a dependent child at any time in the year, the family thresholds apply. For a couple, the test runs on your combined income for MLS purposes against the family tiers, starting at $210,000 for 2026-27. If the family is over the threshold, each partner without hospital cover pays the surcharge on their own taxable income and fringe benefits, not on the combined figure.
There is one exception. A spouse whose own income for MLS purposes is $28,011 or less pays no surcharge, however high the family total. The ATO's payment page still shows the older $27,222 figure; the Medicare Levy Act and the 2026 tax return instructions use $28,011.
Whether you are single or a family for the rate is decided by your situation on 30 June. A single parent is on the family thresholds too, which is why the calculator lets you enter nil for a spouse. Each dependent child after the first adds $1,500 to every family tier.
Does part-year hospital cover reduce the surcharge?
Yes. The surcharge applies only to the days in the year you did not hold appropriate private patient hospital cover. On $130,000 for 2026-27 a full year without cover costs $1,625. With cover for 219 of the 365 days, the surcharge falls to $650 for the 146 uncovered days.
Extras cover on its own does not count, however comprehensive. The policy has to be private patient hospital cover with an excess of $750 or less for a single, or $1,500 or less for a couple or family. A hospital policy with a higher excess leaves you paying the surcharge as if you had no cover.
How much is the surcharge at common incomes?
A single person with no fringe benefits, investment losses or salary sacrifice, and no hospital cover all year. Our calculation from the ATO tiers.
| Taxable income | 2025-26 tier | 2025-26 surcharge | 2026-27 tier | 2026-27 surcharge |
|---|---|---|---|---|
| $100,000 | Base tier | $0 | Base tier | $0 |
| $106,000 | Tier 1 | $1,060 | Tier 1 | $1,060 |
| $115,000 | Tier 1 | $1,150 | Tier 1 | $1,150 |
| $125,000 | Tier 2 | $1,563 | Tier 2 | $1,563 |
| $140,000 | Tier 2 | $1,750 | Tier 2 | $1,750 |
| $165,000 | Tier 3 | $2,475 | Tier 3 | $2,475 |
| $200,000 | Tier 3 | $3,000 | Tier 3 | $3,000 |
The 2% Medicare levy is charged on top of every figure here. For the levy itself use the Medicare levy calculator, and for how the two charges differ see the Medicare levy guide.
Frequently asked questions
What is the Medicare levy surcharge threshold for 2026-27?
How much is the Medicare levy surcharge?
Do I pay the surcharge on my whole income or just the amount over the threshold?
Does extras cover stop the Medicare levy surcharge?
Does negative gearing reduce my Medicare levy surcharge?
Is the Medicare levy surcharge the same as the Medicare levy?
Is the surcharge taken out of my pay?
Sources
- ATO: Medicare levy surcharge income, thresholds and rates (QC49961, updated 22 June 2026). The 2025-26 and 2026-27 tiers, the rates and the $1,500 increase for each dependent child after the first.
- ATO: Medicare levy surcharge (QC27040). Who pays it, and that it is charged on top of the Medicare levy.
- ATO: Appropriate level of private patient hospital cover (QC71224, updated 30 April 2026). The $750 and $1,500 excess limits.
- ATO: Medicare levy surcharge and your tax return (QC71226, updated 22 June 2026). What the rate is charged on, and the day-by-day apportionment.
- ATO: M2 Medicare levy surcharge 2026 (QC107219, updated 30 May 2026). The 2025-26 worked examples, including a couple whose combined income sets the rate.
- Federal Register of Legislation: Medicare Levy Act 1986 (compilation of 1 July 2026). Section 8D, including the $28,011 own-income exemption for a married person.