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Find out if you pay the Medicare Levy Surcharge and how much, based on ATO income thresholds and private hospital cover.
The MLS applies to Australian residents whose income for MLS purposes is above the threshold and who do not have an appropriate level of private hospital cover. Rates are 1%, 1.25% or 1.5% depending on income tier.
The ATO's special definition: taxable income, plus reportable fringe benefits, plus reportable employer super contributions, plus any net investment or rental losses. This decides whether you pay and at what rate — not how much. If you have a spouse, the ATO uses your combined income against the family thresholds, so enter the combined figure and choose Family below.
Your taxable income plus total reportable fringe benefits, plus any amount on which family trust distribution tax has been paid. This is a different figure from the one above: it excludes reportable super contributions and investment losses. Leave it blank if the two are the same — they are, unless you salary sacrifice or are negatively geared.
You are a family if at any time in the year you had a spouse or a dependent child and contributed to their maintenance — regardless of what they earned.
Appropriate cover for full year avoids MLS
Annual MLS
$1,200
Tier 1 — 1.00% of $120,000
Income for MLS
$120,000
Threshold used: $105,000
Tier
Tier 1: 1% (income $105,000–$123,000)
Consider private hospital cover that meets the requirements to avoid MLS. Cover must be with an Australian-registered health fund.
This calculator is for estimation only. Income for MLS is defined by the ATO and can include reportable fringe benefits, reportable super contributions and certain losses. Private hospital cover must meet specific requirements. For your exact position, see ATO – Medicare levy surcharge and ATO – MLS income thresholds and rates.
This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.
The Medicare Levy Surcharge (MLS) is an additional tax of 1-1.5% on top of the standard 2% Medicare levy. It applies to higher-income earners who don't have an appropriate level of private hospital cover.
The surcharge is designed to encourage people to take out private health insurance and reduce demand on the public hospital system. If you earn above the threshold and don't have cover, you pay the surcharge when you lodge your tax return.
No. The Medicare levy (2%) applies to most taxpayers. The MLS (1-1.5%) is an additional charge for higher earners without private hospital cover.
You need a complying private hospital cover policy with an excess no greater than $750 (singles) or $1,500 (families). Check with your health fund.
At $150,000 (Tier 2) in 2026–27, the MLS is 1.25% = $1,875 per year. Basic hospital cover often costs less than this.
Yes, and not just the base one — every family figure moves. Each dependent child after the first adds $1,500 to the base threshold and to both tier boundaries, so the ladder shifts up rather than stretching. A family with three children has a base threshold of $213,000 in 2026–27 instead of $210,000, which is why the same $210,001 of combined income that costs a childless couple $2,100 costs them $0. A dependent child here is one under 21, or 21 to 24 and studying full-time.
Possibly not. On the family basis the tiers are read against your combined income, so a low earner with a high-earning spouse can be dragged into a tier they would never reach alone — and then the surcharge is charged on their own taxable income. But the ATO exempts them outright: if your own income for MLS purposes is $28,011 or less you pay no surcharge for the year, however much your family earns. Enter your own figure in the second income box to have that applied.
Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.
This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.
What can move this result
This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.