The Medicare levy is 2.0% of taxable income for most Australian residents; on low incomes it phases in at 10.0% of the income above the threshold. The Medicare Levy Surcharge (MLS) is an additional 1%–1.5% for higher earners without private hospital cover.
Australian residents pay a 2% Medicare levy on their taxable income, subject to the low-income thresholds below, to fund the public healthcare system. The levy is calculated on your total taxable income. Low-income thresholds change that: income at or below the threshold pays no levy, and income just above it pays a reduced levy that shades in at 10.0% of the excess until it reaches the full 2.0% (family thresholds also apply under s 8).
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.
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. A single person with taxable income of $28,011 or less pays no levy, and a reduced levy applies on income above that up to $35,013.
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.
