Medicare Levy Surcharge Calculator 2026–27
Find out whether you'll pay the Medicare levy surcharge, how much, and whether basic hospital cover would cost you less.
Printed from ClearCalc (clearcalc.com.au/medicare-levy-surcharge-calculator/). Estimates only, not financial advice.
What is the Medicare levy surcharge?
The Medicare levy surcharge (MLS) is an extra tax of 1% to 1.5% for people on higher incomes who don't have an appropriate level of private hospital cover. It's on top of the normal 2% Medicare levy. Extras-only cover doesn't count, and the policy's excess must be no more than $750 for singles or $1,500 for families and couples.
2026–27 thresholds and rates
| Tier | Single | Family | MLS rate |
|---|---|---|---|
| Base tier | $105,000 or less | $210,000 or less | 0% |
| Tier 1 | $105,001–$123,000 | $210,001–$246,000 | 1% |
| Tier 2 | $123,001–$164,000 | $246,001–$328,000 | 1.25% |
| Tier 3 | $164,001 or more | $328,001 or more | 1.5% |
The family threshold goes up by $1,500 for each dependent child after the first. A single parent with dependent children uses the family thresholds.
What counts as income for MLS purposes
It's more than your taxable income. The ATO adds your reportable fringe benefits, any net investment losses (such as negative gearing on a rental property) and reportable super contributions (salary sacrifice and personal deductible contributions). For families, your partner's income is added too. So someone earning $100,000 who salary sacrifices $8,000 into super can still go over the $105,000 threshold.
Private health insurance rebate
The same tiers decide your government rebate on premiums. From 1 April 2026 the rebate is 24.118% at the base tier for people under 65, falling to 16.079% (tier 1), 8.038% (tier 2) and nothing at tier 3. It's higher for older policyholders: up to 28.139% for ages 65–69 and 32.158% for 70 and over. These percentages apply until 31 March 2027.
Is hospital cover cheaper than paying the surcharge?
Often, yes. At $130,000, a single person would pay $1,625 in surcharge, while a basic hospital policy can cost less than that after the rebate. Get a real quote and enter it above. Also think about Lifetime Health Cover loading: delaying hospital cover past age 31 adds 2% to your premiums for every year you wait, for up to 10 years. To see the surcharge in your overall tax, try the tax return calculator or the pay calculator.
Frequently asked questions
Do I pay the surcharge if I have extras cover only?
Yes. Only an appropriate level of private hospital cover exempts you. Extras (general treatment) cover on its own doesn't count.
Is the surcharge worked out for the whole year?
No. You pay it only for the days you, your spouse or dependants didn't hold appropriate hospital cover. Cover for half the year means roughly half the surcharge.
Does salary sacrifice reduce my income for MLS?
No. Salary sacrificed super is a reportable super contribution and is added back. Reportable fringe benefits and net investment losses are added back too.
When do the new thresholds apply?
The 2026–27 thresholds ($105,000 single, $210,000 family) apply to income from 1 July 2026 to 30 June 2027, and to your private health insurance rebate tier from 1 July 2026.
Official sources used for this calculator include: ATO – Tax rates for Australian residents, ATO – Deductions you can claim, ATO – GST. See how we calculate.
Reviewed by the ClearCalc team. Last reviewed October 2026. This calculator gives an estimate for general information only. Check important figures with the relevant government agency or a licensed professional.