Medicare Levy & MLS Calculator (Australia)
Work out how much you'll pay in Medicare Levy and whether you're liable for the Medicare Levy Surcharge (MLS). The Medicare Levy is a flat 2% tax that funds public healthcare, while the MLS is an additional charge for higher earners without private hospital cover.
If your income exceeds $93,000 (singles) or $186,000 (families), you may be paying more in MLS than basic hospital cover would cost. This calculator helps you see the numbers and make an informed decision.
This calculator supports both singles and families/couples. For families, the MLS is based on combined income but calculated separately for each adult.
2024-25 Medicare Levy and Medicare Levy Surcharge rates
Enter your taxable income to calculate Medicare Levy
Understanding Medicare Levy vs MLS
The Medicare Levy and Medicare Levy Surcharge are often confused, but they're quite different:
- Medicare Levy (2%): A tax paid by most Australian residents to fund the public healthcare system. It applies regardless of whether you use public or private healthcare.
- Medicare Levy Surcharge (1-1.5%): An additional tax that only applies to higher-income earners who do not have eligible private hospital insurance. It's designed to encourage higher earners to take out private cover and reduce pressure on the public system.
The key difference is that you can avoid the MLS by having private hospital cover, but the Medicare Levy applies to almost everyone (with some low-income exemptions).
What does this calculator include?
- Medicare Levy calculation at 2% of taxable income
- Medicare Levy Surcharge calculation based on income thresholds
- Visual display of where your income sits relative to MLS thresholds
- Estimate of potential savings if you take out private hospital cover
- Single person thresholds for 2024-25 ($93k, $108k, $144k)
- Family thresholds (base $186k + $1,500 per dependent)
- Separate MLS calculation for each adult in a family
What does this calculator not include?
- Partial-year insurance coverage
- Scenarios where one spouse has cover and the other doesn't
- Dependent children income
- Medicare Levy reduction for low-income earners (under $27,222 may pay less)
- Medicare Levy exemptions (certain visa holders, foreign residents)
- Reportable fringe benefits and reportable super contributions in MLS income
- Private health insurance rebate calculations
This is a simplified estimate. Your actual levy may differ based on your individual circumstances.
FAQ
What is the Medicare Levy?
The Medicare Levy is a 2% tax on your taxable income that helps fund Australia's public healthcare system. Most Australian residents pay this levy, though low-income earners may be exempt or pay a reduced rate. The levy is separate from any income tax you pay and is calculated on top of your regular tax bill.
What is the Medicare Levy Surcharge (MLS)?
The Medicare Levy Surcharge is an additional tax of 1% to 1.5% that applies to higher-income earners who do not have eligible private hospital insurance. For singles, it applies if your income exceeds $93,000 in 2024-25. The surcharge is designed to encourage higher earners to use the private healthcare system rather than relying solely on Medicare.
Do I need to pay the MLS?
You may need to pay the MLS if your income for MLS purposes exceeds $93,000 (singles) and you don't have an eligible private hospital insurance policy. The surcharge rate increases with income: 1% for $93,001-$108,000, 1.25% for $108,001-$144,000, and 1.5% for incomes above $144,000.
What counts as eligible private health insurance?
To avoid the MLS, you need a private hospital insurance policy with an excess of $750 or less for singles ($1,500 for families). Extras-only cover or general treatment policies do not count — you specifically need hospital cover. The policy must be held for the full financial year to get the full exemption.
Is the MLS worth avoiding with private health insurance?
It depends on your income and the cost of private health insurance. If your MLS bill is higher than basic hospital cover premiums, getting insurance could save you money while also providing health benefits. For example, if you earn $100,000 and face a $1,000 MLS bill, but basic hospital cover costs $1,200 per year, the decision comes down to whether the health benefits are worth the extra $200.
What is the family MLS threshold?
The base family MLS threshold for 2024-25 is $186,000. This increases by $1,500 for each dependent child after the first. So a family with 2 children has a threshold of $187,500.
How is MLS calculated for families?
The MLS rate is determined by your combined family income, but the surcharge is calculated separately on each adult's taxable income. For example, if the family rate is 1% and you earn $100,000 while your spouse earns $90,000, your MLS would be $1,000 and your spouse's would be $900.
Disclaimer
This calculator provides estimates only and does not constitute financial or tax advice. The Medicare Levy and Medicare Levy Surcharge calculations can be complex, with various exemptions and adjustments that may apply to your situation.
Before making decisions about private health insurance, consult a registered tax agent or licensed financial adviser who can assess your complete financial picture.