Medicare Levy Surcharge (MLS) calculator
Not sure if you’ll need to pay the MLS come tax time? Give us a call and one of our health insurance comparison experts can explain all you need to know about the MLS.
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What is the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is an extra tax charged by the Australian Government via your annual income tax return. The purpose of the surcharge is to take pressure off the public healthcare system by encouraging higher-income earners to take out hospital cover.
The Medicare Levy Surcharge (MLS) is owed on top of the regular Medicare levy, but only applies to high-income earners who don’t have an eligible private hospital cover policy. As of 1 July 2026, if you meet the following Medicare Levy Surcharge thresholds, without sufficient private health cover, you will likely need to pay the MLS:1
- singles who earn more than $105,000
- couples with a combined income of more than $210,000 (including families and single parents).
If the above applies to you, you’ll owe the MLS for every day you didn’t hold appropriate private patient hospital cover in the full financial year. So, if you get insured from the full month of December, you may still owe MLS from July to November.
Private hospital cover with an excess of no more than $750 for singles or $1,500 for couples and families can help you avoid the MLS.
| Medicare Levy Surcharge – Income Tiers (all ages) | ||||
|---|---|---|---|---|
| Surcharge rate | 0% | 1% | 1.25% | 1.5% |
| Single income thresholds |
$105,000 or less ($0 payable) |
$105,001 – $123,000 (~$1,050 – $1,230 payable) |
$123,001 – $164,000 (~$1,537 – $2,050 payable) |
$164,001+ ($2,460+ payable) |
| Family income thresholds^ |
$210,000 or less ($0 payable) |
$210,001 – $246,000 (~$2,100 – $2,460 payable) |
$246,001 – $328,000 ($3,075 – $4,100 payable) |
$328,001+ (~$4,920+ payable) |
|
Retrieved from Australian Taxation Office | Information current from 1 July 2026. Dollar amounts payable are rounded up. ^ For families with children, thresholds increase by $1,500 for each child after the first. Families include couples, de facto couples, and single parents. |
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Taking out an extras cover policy as a standalone product will not help you avoid paying the MLS.
A calculator can give you an estimate of whether or not you’ll have to pay the Medicare Levy Surcharge (MLS) and the rate that may apply to you. When you speak to one of our health insurance comparison experts over the phone, they can calculate an estimate of your MLS based on the following criteria:
- whether you hold qualifying private hospital cover from an approved health fund
- your current relationship status
- how many dependent children you have
- your annual taxable income for Medicare Levy Surcharge purposes as an individual, with your partner, or based only on your partner’s income depending on your circumstances.
Frequently Asked Questions about Medicare Levy Surcharge
Do I have to pay the Medicare Levy Surcharge?
According to the PrivateHealth.gov.au, as of 1 July 2026, if you earn less than $105,000 as a single or $210,000 as a couple/family, you won’t have to pay the MLS.1 If you earn above the income threshold and don’t hold an appropriate private hospital policy or qualify for an exemption, you will pay the MLS for every day of the tax year you aren’t insured.
The Australian Taxation Office (ATO) uses a different definition of income for MLS purposes than you might be used to.1 Unlike your regular taxable income, ‘income for MLS purposes’ is your taxable income (not including any assessable First Home Super Saver released amount) plus any reportable fringe benefits and super contributions, minus your net property and investment losses.
This can make it difficult to know exactly how much MLS you’ll have to pay. If you’re unsure what your income for MLS purposes could be, you can use an MLS calculator or talk to a financial advisor to get a better idea of whether you meet the MLS income threshold or not.
Do I qualify for Medicare Levy Surcharge exemptions?
Medicare Levy Surcharge exemptions may apply if you’re a blind pensioner, receiving sickness allowances from Centrelink, hold an Australian Defence Force or Veterans’ Affairs Repatriation Health Card (Gold Card), are ineligible for Medicare benefits, or you’re a non-Australian resident.
If any of the above conditions apply, you may be exempt from the Medicare levy and MLS, but we recommend you visit the ATO’s website to make sure.
Is it worth taking out private health insurance to avoid the MLS?
Taking out hospital cover will not only help you avoid the Medicare Levy Surcharge, but it also helps pay for your treatment as a private inpatient, allows you to choose your available doctor, have a private room (if available), and avoid public waiting lists. However, whether it’s worth taking out private health insurance to avoid the MLS will depend on your personal circumstances, your healthcare needs and how much your policy will cost you compared to the MLS.
Meet our health insurance expert, Steven Spicer
As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.
Want to know more about health insurance?
1 PrivateHealth.gov.au: Medicare Levy Surcharge. Accessed June 2026
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