Medicare levy calculator
The Medicare levy is 2% of your taxable income. Earn under the threshold and you pay less, or nothing. Work out your own figure below.
Your details
Your Medicare levy
$1,300
2.00% of your taxable income
You pay the full 2% Medicare levy.
What the Medicare levy is
The Medicare levy is a flat 2% tax on your taxable income. It helps pay for Medicare: bulk-billed doctor visits, public hospital treatment, and subsidised medicines.
Almost every Australian taxpayer pays it. On $80,000 of taxable income the levy is $1,600 a year. On $150,000 it is $3,000. There are no tiers and no brackets. It is just 2% of the whole amount.
You will not usually see it as a separate line in your pay. Your employer withholds it with your income tax, then it is worked out properly when you lodge your return.
Who pays less, or nothing
Three groups pay a reduced levy or none at all:
- Low income earners. Below the threshold you pay nothing. Just above it, the levy phases in slowly instead of jumping to the full 2%.
- Seniors and pensioners. If you qualify for the seniors and pensioners tax offset, your threshold is higher.
- People with an exemption. Blind pensioners, some Defence Force and Veterans' Affairs card holders, and people not entitled to Medicare benefits.
The full rules are on our Medicare levy exemption page, including how to claim one and what a half exemption means.
Levy or surcharge?
These two get mixed up constantly. They are not the same thing, and you can pay both.
Medicare levy
A flat 2% that almost every taxpayer pays. It helps fund Medicare. Private hospital cover makes no difference to it.
Medicare Levy Surcharge
An extra 1% to 1.5% on top. It only hits higher earners who hold no hospital cover. Buying cover removes it.
So the levy is not avoidable. The surcharge often is. Check whether you owe the surcharge as well.
How the reduction works
Earn at or under the threshold and you pay no levy. Just above it, the levy phases in slowly rather than jumping to the full 2%.
In that range you pay 10 cents for each dollar above the threshold. Once your income reaches $35,013, the full 2% applies.
| Situation | No levy up to | Full 2% from |
|---|---|---|
| Single | $28,011 | $35,013 |
| Family, no children | $47,238 | $59,047 |
| Single senior or pensioner | $44,268 | $55,335 |
| Family senior or pensioner | $61,623 | $77,028 |
Figures are for 2025-26. Family thresholds rise by $4,338 for each dependent child. This is an estimate, not tax advice.
Medicare levy questions
How much is the Medicare levy?
It is 2% of your taxable income. On $80,000 that is $1,600 a year. It is taken out through your pay, then settled when you lodge your return.
Who does not pay the Medicare levy?
You pay nothing if your taxable income is at or below the low-income threshold. For 2025-26 that is $28,011 for a single person, or $47,238 for a family. Some people are also exempt on medical or foreign-resident grounds.
Is the Medicare levy the same as the Medicare Levy Surcharge?
No. The levy is 2% and almost everyone pays it. The surcharge is an extra 1% to 1.5% that only applies to higher earners who hold no private hospital cover. You can pay both in the same year.
Does private health insurance reduce the Medicare levy?
No. Hospital cover has no effect on the 2% levy. It can remove the Medicare Levy Surcharge, which is a different charge.
What is the Medicare levy reduction?
If your income sits just above the threshold, you pay a reduced levy instead of the full 2%. It rises by 10 cents for each dollar above the threshold. The full 2% starts at $35,013 for a single person in 2025-26.
Do seniors and pensioners pay the Medicare levy?
Yes, but the threshold is higher. For 2025-26 a single senior or pensioner pays nothing up to $44,268, against $28,011 for everyone else.