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A calculator is an important tool that can give you an estimate of whether or not you’ll have to pay the Medicare Levy Surcharge (MLS) and the rate at which it will apply to you based on your current circumstances.

When you speak to one of our health insurance experts over the phone, we can calculate your eligibility for the MLS based on the following criteria:

  • Whether you hold qualifying private hospital cover from an approved health fund
  • Your current relationship status
  • How many dependant children you have
  • Your annual taxable income for MLS purposes as an individual, with your partner or based purely on your partner’s income.

The MLS amount we calculate for you will only be an estimate. You’ll have to wait until you lodge your income tax return to know your exact MLS amount.

What is the Medicare Levy Surcharge?

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 a private hospital cover policy. The following Australian taxpayers will owe the MLS, with few exceptions (From 1 July 2023):

  • Singles who earn more than $93,000
  • Couples that collectively earn more than $186,000 (including families and single parents).

You must also take out a policy with an excess of no more than $750 for singles or $1,500 for couples and families.

Furthermore, if you’re one of the individuals outlined above, you will owe the MLS for every day in the tax year you did not hold appropriate private hospital cover. So, if you get insured in December, you may still owe MLS from July to November.

Medicare Levy Surcharge calculator at tax time

Frequently asked questions

What is the Medicare levy and how is it different from the Medicare Levy Surcharge?

The MLS differs from the Medicare levy in that the latter is a 2% tax paid by most taxpayers to fund the public healthcare system. For those on higher incomes, the MLS is payable in addition to the Medicare levy.
Thankfully, the MLS can be easily avoided by taking out hospital cover, though keep in mind if you haven’t held it for the entire tax year, you’ll likely have to pay the MLS for each day you didn’t have cover.

Do I need to pay the Medicare Levy Surcharge?

If you earn less than a specified amount, you will not pay the MLS. If you earn above the respective income threshold and do not hold an appropriate private hospital policy, you will pay the MLS for every day of the tax year you aren’t insured.
Keep in mind that 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, it might be worth considering private hospital insurance just to be safe.
Please note: Taking out an extras cover policy as a standalone product will not help you avoid paying the MLS.

Do I qualify for Medicare Levy Surcharge exemptions?

If you’re exempt from the Medicare levy, you could also be exempt from the MLS. Some exemptions to the Medicare levy and Surcharge include:

  • Blind pensioners
  • Those receiving sickness allowances from Centrelink
  • Australian Defence Force or Veterans’ Affairs Repatriation Health Card (Gold Card) holders
  • Those ineligible for Medicare benefits altogether
  • Non-Australian residents.

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 MLS, but it also helps pay for your treatment as a private patient, allows you to choose your doctor, have a private room (if available) and avoid public waiting lists.

Australia’s public hospital waiting lists have continued to increase over recent years, with the percentage of patients waiting more than a year for elective surgeries growing from 1.7% to 7.9% between 2017 and 2021.2 This is partially due to the COVID-19 pandemic, although there has also been steady growth over the years prior.

Don’t want to pay MLS? Compare hospital insurance

Nobody wants to pay a surcharge if they can help it. Regardless of whether you’ve used an MLS calculator or not, there are more benefits to hospital cover than just avoiding a surcharge.

If you’re considering private hospital insurance for yourself or your family, comparing policies is a great place to start. Our free health insurance comparison service lets you review policies available from a range of brands in minutes.

It couldn’t be easier to compare prices and coverage, so why not see what we have to offer?


1 Australian Taxation Office: Medicare Levy Surcharge, Last updated July 2022.

2 Elective surgery waiting times 2020-21, Australian Institute of Health and Welfare, Australian Government. 2022.

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