Medicare Levy Surcharge rates and tiers
There are four tiers, and which one you land in decides everything. Find your income below to see your rate, then what it costs you for the year.
Quick answer
Below threshold
0%
You generally do not pay MLS if your income is below the relevant threshold of $105,000 for singles or $210,000 for families.
Middle tiers
1%–1.25%
Many higher-income singles, couples, and families fall into these MLS tiers. The surcharge increases as income rises within these ranges.
Highest tier
1.5%
The highest MLS rate applies once income moves above the top threshold of $164,000 for singles or $328,000 for families.
2026-27 Medicare Levy Surcharge thresholds and rates
Your Medicare Levy Surcharge rate depends on your income for MLS purposes, your household type, and whether you held eligible private hospital cover during the financial year.
Singles
| Tier | Income range | MLS rate |
|---|---|---|
| Base tier | $105,000 or less | 0% |
| Tier 1 | $105,001 – $123,000 | 1% |
| Tier 2 | $123,001 – $164,000 | 1.25% |
| Tier 3 | $164,001 or more | 1.50% |
Couples and families
| Tier | Combined income | MLS rate |
|---|---|---|
| Base tier | $210,000 or less | 0% |
| Tier 1 | $210,001 – $246,000 | 1% |
| Tier 2 | $246,001 – $328,000 | 1.25% |
| Tier 3 | $328,001 or more | 1.50% |
Family thresholds increase by $1,500 for each dependent child after the first. This table updates from the calculator start/projection date.
What counts as income for MLS purposes?
Medicare Levy Surcharge is not always calculated from salary alone. Your income for MLS purposes can include several amounts that increase your assessed income.
Taxable income
Reportable fringe benefits
Reportable super contributions
Total net investment losses
How is Medicare Levy Surcharge calculated?
Annual surcharge
Your MLS is generally calculated by applying the relevant MLS rate to your income for MLS purposes.
Partial-year cover
If you only held eligible hospital cover for part of the year, your surcharge may be calculated for the days you were not covered.
Extras cover does not count
Dental, optical, physio, and extras-only policies generally do not exempt you from the Medicare Levy Surcharge. You usually need eligible private hospital cover.
Calculate how much MLS you may pay
Use the calculator below to estimate your Medicare Levy Surcharge based on your income, household type, hospital cover status, and cover start date.
If you already have cover, it can help estimate how much surcharge you may avoid. If you do not have cover, it can compare whether hospital insurance may cost less than paying extra tax.
Income & Household
Health Insurance Details
1 July 2026 – 30 June 2027
The premium for eligible hospital cover. Not sure? The comparison below fills real prices in for you.
Advanced options
Must be $750 or less (singles) or $1,500 or less (families) to clear MLS.
Your result
-$929
Paying the surcharge looks cheaper
This compares your estimated Medicare Levy Surcharge against the cost of hospital cover for the selected period.
Income used
Taxable income + reportable benefits
MLS is a tax surcharge. Lifetime Health Cover loading is different. LHC increases hospital cover premiums if it applies.
FY 2026-27 coverage period
The later your cover starts in the financial year, the fewer days are covered and the more surcharge may remain payable.
The bottom line
On this income you sit under the 2026-27 surcharge threshold, so no Medicare Levy Surcharge applies. Hospital cover is then a health decision rather than a tax one, because there is no surcharge for it to offset.
Income Break-Even Point
$115,000
If your income stays above this line, private insurance is objectively cheaper than paying the surcharge.
ATO Policy Compliance
To clear MLS you need hospital cover with an excess of $750 or less (singles) or $1,500 or less (families). Extras-only cover does not count.
Compliant cover
Policies that clear your surcharge
To remove your $0 surcharge, you need hospital cover with an excess of $750 or less. These are the cheapest Bronze Plus policies from five major insurers.
Prices from privatehealth.gov.au, July 2026 release, for WA. The government rebate is applied for your income tier. Under-30 discounts are not included, so you may pay less. Links may earn us a commission at no cost to you.
MedibankBronze Plus Value
HBFLite Bronze Hospital Plus
BupaBronze Plus Simple Hospital
nibBronze Protect Hospital Plus
