Medicare Levy & MLS Thresholds 2025-26

The Medicare levy is a flat 2% of taxable income for Australian residents. The Medicare Levy Surcharge (MLS) is an additional 1%–1.5% for higher earners without private hospital cover.

Medicare Levy (2%)

All Australian residents pay a 2% Medicare levy on their taxable income to fund the public healthcare system. The levy is calculated on your total taxable income — there are no brackets.

Income	Medicare Levy (2%)
$60,000	$1,200
$80,000	$1,600
$100,000	$2,000
$120,000	$2,400
$150,000	$3,000
$200,000	$4,000

Medicare Levy Surcharge — Singles

The MLS applies to singles earning above $101,000 who don't hold an appropriate level of private hospital cover.

Income Range	MLS Rate
$0 – $101,000	Nil
$101,001 – $118,000	1.0%
$118,001 – $158,000	1.3%
$158,001 +	1.5%

MLS — Family Thresholds

For families (couples and single parents), the MLS income thresholds are doubled. The base family threshold is $202,000, increasing by $1,500 for each dependent child after the first.

Dependents	Tier 1 Threshold	Tier 2 Threshold	Tier 3 Threshold
Couple, no children	$202,000	$236,000	$316,000
1 child	$202,000	$236,000	$316,000
2 children	$203,500	$237,752	$318,347
3 children	$205,000	$239,505	$320,693
4 children	$206,500	$241,257	$323,040

MLS rates: Tier 1 = 1.0%, Tier 2 = 1.25%, Tier 3 = 1.5%

MLS vs Private Health Insurance

If you earn above the MLS threshold, compare the cost of private hospital cover against your potential MLS liability:

Income	MLS Rate	Annual MLS	Medicare Levy	Total Levy
$105,000	1.0%	$1,050	$2,100	$3,150
$120,000	1.3%	$1,500	$2,400	$3,900
$140,000	1.3%	$1,750	$2,800	$4,550
$170,000	1.5%	$2,550	$3,400	$5,950
$200,000	1.5%	$3,000	$4,000	$7,000

Frequently asked questions

How much is the Medicare levy in 2025-26?

The Medicare levy is 2% of your taxable income for Australian residents. On a $100,000 income, you pay $2,000 in Medicare levy. Low-income earners below $27,222 may qualify for a reduction or full exemption.

What is the Medicare Levy Surcharge?

The MLS is an additional 1%–1.5% levy on top of the standard 2% Medicare levy. It applies to singles earning over $101,000 (or families over $202,000) who don't hold an appropriate level of private hospital cover.

How can I avoid the Medicare Levy Surcharge?

You can avoid the MLS by holding a complying private hospital insurance policy. The cost of private cover is often less than the MLS, especially for higher incomes. Compare the cost of a basic hospital policy against your MLS liability.

What are the MLS thresholds for families?

For families (couples and single parents), the MLS threshold starts at $202,000. This increases by $1,500 for each dependent child after the first.

Do non-residents pay the Medicare levy?

No. Non-residents for tax purposes do not pay the Medicare levy or the Medicare Levy Surcharge. However, they also cannot access Medicare benefits.

Is the Medicare levy included in PAYG withholding?

Yes. Your employer's PAYG withholding typically includes the Medicare levy. The amount withheld from your pay already accounts for the 2% levy, so you generally don't owe extra at tax time for the base levy.

Calculate your Medicare levy

Use our Medicare Levy & MLS Calculator for a personalised calculation including family income, dependents, and private health insurance status.

Then continue with whether private health is worth it, the private health rebate guide, or family MLS thresholds.