Updated for 2026-27

Medicare Levy Surcharge Calculator

Check whether the 1% to 1.5% surcharge applies to you in 2026-27, what it costs on your income, and exactly what private hospital cover avoids it.

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Medicare Levy Surcharge Calculator 2026-27

Your situation

Disclaimer: This calculator provides general estimates, not personal tax or financial advice. Figures use published ATO rates for 2026-27 and may not match your exact situation, offsets or deductions. Do not act on these results alone. For official guidance, visit the ATO, or speak to a registered tax agent.

A single on $130,000 with no hospital cover pays a $1,625 Medicare levy surcharge in 2026-27. That is Tier 2, 1.25% of the whole $130,000, on top of the $2,600 Medicare levy.
The mechanics

How Is the Medicare Levy Surcharge Calculated?

Two tests, then a flat percentage of everything.

The MLS, a separate charge from the Medicare levy itself, applies only if both tests fail. First, your income for MLS purposes is above the base threshold: $105,000 for singles or $210,000 for families in 2026-27 (ATO MLS thresholds page). Second, you did not hold an appropriate level of private hospital cover for the full year. Pass either test and the surcharge is nil.

If it applies, the rate for your tier is charged on your whole income for MLS purposes, not just the slice above the threshold. A single on $124,000 pays 1.25% of all $124,000, which is $1,550. This flat structure is why crossing a threshold by one dollar can add four figures to your assessment.

The ATO’s own worked example (2026-27): Tom is single, no cover, with a $90,000 taxable income plus $27,000 of reportable fringe benefits. His income for MLS purposes is $117,000, which is Tier 1, so his surcharge is 1% of $117,000, or $1,170. The fringe benefits triggered it, not the salary.

The surcharge is separate from the 2% Medicare levy that most residents pay. Work that levy out with the Medicare levy calculator, or read the MLS guide for the policy background.

Medicare Costs on $130,000 (Single, No Cover)

Medicare levy (2%)$2,600
Medicare levy surcharge (1.25%)$1,625
Combined Medicare cost$4,225
Official tiers

MLS Income Tiers for 2026-27

Verified against the ATO and privatehealth.gov.au, which publish identical figures.

ThresholdBase tierTier 1Tier 2Tier 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
MLS rate0%1%1.25%1.5%

Income for MLS purposes, FY2026-27. The family threshold rises by $1,500 for each MLS dependent child after the first. Single parents and couples, including de facto, use the family tiers. Source: ATO, Medicare levy surcharge income, thresholds and rates (updated 22 June 2026).

Computed for 2026-27

The Surcharge at Common Single Incomes

What a single person with no hospital cover pays at each income level.

Income for MLS purposesTierRateSurcharge per yearPer fortnight
$100,000Base0%$0$0
$110,000Tier 11%$1,100$42
$120,000Tier 11%$1,200$46
$130,000Tier 21.25%$1,625$63
$140,000Tier 21.25%$1,750$67
$150,000Tier 21.25%$1,875$72
$160,000Tier 21.25%$2,000$77
$170,000Tier 31.5%$2,550$98
$180,000Tier 31.5%$2,700$104
$200,000Tier 31.5%$3,000$115

Computed from the 2026-27 single tiers. The jump between $100,000 and $110,000 shows the cliff: one dollar over $105,000 charges the rate on the entire income.

Computed for 2026-27

The Surcharge at Common Family Incomes

Combined income for a couple or single parent with no hospital cover, one child or none.

Family income for MLS purposesTierRateSurcharge per year
$200,000Base0%$0
$220,000Tier 11%$2,200
$240,000Tier 11%$2,400
$260,000Tier 21.25%$3,250
$280,000Tier 21.25%$3,500
$300,000Tier 21.25%$3,750
$320,000Tier 21.25%$4,000
$340,000Tier 31.5%$5,100

Add $1,500 to the $210,000 family threshold for each MLS dependent child after the first. Everyone in the family must be covered for the exemption to apply; the surcharge is assessed on each adult’s share.

Comparison

MLS vs the Medicare Levy

Two separate charges that get confused constantly. You can pay one, both, or neither.

FeatureMedicare levyMedicare levy surcharge
Who paysMost resident taxpayersHigher earners without hospital cover
Rate2% of taxable income1% to 1.5% of income for MLS purposes
Income baseTaxable incomeBroader: adds fringe benefits, reportable super, investment losses
Avoided by private coverNo, neverYes, with full-year hospital cover
Starts at (single, 2026-27)Phases in from $28,011$105,001

Levy low-income figures are the 2025-26 thresholds; the ATO had not published 2026-27 amounts as at 23 July 2026. Sources: ATO Medicare levy pages, ATO MLS thresholds page.

The decision

Is the Surcharge More Than Basic Hospital Cover?

Above Tier 1, usually yes. The arithmetic that sells private health insurance.

At the bottom of Tier 1 the surcharge is about $1,050 a year, and at the top of Tier 1 it is $1,230. Our internal research compilation puts entry-level basic hospital policies at roughly $1,000 to $1,500 a year as an indicative range. That figure is not from an official premium index, so treat it as a ballpark and price actual policies on privatehealth.gov.au, the government comparison site.

The direction is still clear. In Tier 2 the surcharge runs from $1,538 to $2,050, and in Tier 3 it starts at $2,460 and keeps growing with income. From Tier 2 up, the surcharge alone generally exceeds the cheapest qualifying hospital policy, which means cover can cost less than the tax it removes.

One warning on cheap policies: the excess. A policy only removes the surcharge if its yearly excess is no more than $750 for singles or $1,500 for couples and families (privatehealth.gov.au, from 1 April 2019). A bargain policy with a $1,000 excess saves you nothing at tax time.

The income test

What Counts as Income for MLS Purposes?

It is broader than taxable income, which is how people get caught.

ComponentWhy it is added
Taxable incomeThe starting point, excluding assessable First Home Super Saver released amounts
Reportable fringe benefitsPackaged cars, novated leases and other benefits count even when FBT-exempt
Reportable super contributionsSalary-sacrificed and personal deductible super are added back
Total net investment lossesNegative gearing cannot pull you under the threshold
Spouse amounts (families)Couples are tested on combined income against the family tiers

Source: ATO, Medicare levy surcharge income, thresholds and rates. Salary sacrificing into super lowers your income tax but not your MLS income; see the salary sacrifice calculator.

Who this is for

Who Uses This Calculator?

The people the tiers actually bite.

The single crossing $105,000

A pay rise with a sting

  • One dollar over the threshold triggers 1% of everything
  • At $110,000 that is $1,100 a year
  • Compares the surcharge against basic cover
  • Decides before 30 June, not after

The couple near $210,000

Tested on combined income

  • Two $105,000 incomes fail the family test together
  • Both partners and all dependants need cover
  • One uncovered person means the surcharge applies
  • The threshold rises $1,500 per child after the first

The salary packager

Caught by add-backs

  • Fringe benefits and sacrificed super count as MLS income
  • A $95,000 salary can be $120,000 for MLS purposes
  • The ATO’s Tom example is exactly this trap
  • Checks the broader income figure, not the payslip
What changed

What Changed on 1 July 2026?

Every threshold was indexed up. The rates did not move.

Threshold2025-262026-27
Single, base tier ends$101,000$105,000
Single, Tier 1 ends$118,000$123,000
Single, Tier 2 ends$158,000$164,000
Family, base tier ends$202,000$210,000
Family, Tier 1 ends$236,000$246,000
Family, Tier 2 ends$316,000$328,000

Rates stay at 1%, 1.25% and 1.5%. If your income sat between the old and new single thresholds, say $103,000, you paid the surcharge in 2025-26 but do not in 2026-27. Source: ATO MLS thresholds page (updated 22 June 2026).

Watch out

Common MLS Mistakes

The ones that turn up as a surprise on a notice of assessment.

Counting extras cover

It has to be hospital cover

  • Extras-only policies do not avoid the MLS
  • Overseas visitor and student cover do not either
  • The insurer must be a registered Australian fund
  • Check the policy type, not the brand

A policy with a big excess

The $750 and $1,500 rule

  • Excess above $750 (single) voids the exemption
  • Above $1,500 for couples and families
  • Applies to policies taken out since 1 April 2019
  • Cheap premiums often hide a big excess

Testing your payslip income

Wrong income base

  • MLS income adds fringe benefits and sacrificed super
  • Investment losses are added back too
  • Couples are tested on combined income
  • The calculator above wants this broader figure

Joining mid-year and expecting zero

Part-year cover, part surcharge

  • You pay for the days you were not covered
  • Suspended cover counts as uncovered
  • Cover from 1 July to 30 June gives the full exemption
  • Joining before the year starts is what works
Questions

Medicare Levy Surcharge FAQ

What people ask once they see the number.

Singles with income for MLS purposes above $105,000 and families above $210,000 who do not hold approved private hospital cover for the full year. The rate is 1% to 1.5% of the whole income depending on the tier. Hold adequate hospital cover all year and the surcharge is nil regardless of income.
That income sits in Tier 2 ($123,001 to $164,000), so the rate is 1.25% and the surcharge is $1,625 for 2026-27. It is charged on the whole $130,000, not just the amount over the threshold, and it comes on top of the $2,600 Medicare levy.
Income for MLS purposes, which is broader than taxable income. It adds reportable fringe benefits, reportable super contributions (including salary-sacrificed super), total net investment losses and, for couples, both partners’ amounts combined. A $100,000 salary with $27,000 of fringe benefits is $127,000 for MLS purposes.
Hospital cover with a registered Australian health insurer, held for the full income year, with a yearly excess no higher than $750 for singles or $1,500 for couples and families. Extras-only cover, overseas visitor or student cover, and policies with a bigger excess do not count.
No. The 2% Medicare levy applies to most residents regardless of insurance. Private hospital cover only removes the surcharge, the extra 1% to 1.5% for higher earners. You can pay the levy, the surcharge, both, or neither.
No, but you pay some. Part-year cover gives a partial exemption, and you are charged the surcharge for the days you were not covered. Days on suspended cover count as uncovered. The ATO works this out from your insurer’s statement when you lodge.
Keep going

Related Calculators

Medicare Levy Calculator

The 2% levy and low-income reduction

Sources

Sources

The documents behind every figure on this page.

  • ATO, Medicare levy surcharge income, thresholds and rates (2026-27 tiers, income for MLS purposes, Tom worked example), last updated 22 June 2026.
  • privatehealth.gov.au, Medicare Levy Surcharge (cover requirements, excess caps, part-year rules), modified 21 April 2026.
  • ATO, What is the Medicare levy? (the separate 2% levy), last updated 30 April 2026.
  • ATO, Medicare levy reduction for low-income earners (2025-26 thresholds carried forward, pending 2026-27 publication), last updated 30 June 2026.

Last verified 23 July 2026. The indicative $1,000 to $1,500 basic hospital premium range is an internal research estimate, not an official figure; compare real policies at privatehealth.gov.au.

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