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Medicare Levy Calculator

Calculator

Calculate your Medicare levy and Medicare Levy Surcharge. See if you qualify for a reduction or exemption, and whether you need private health insurance.

Free to useNo data storedAI insightsUpdated: February 2026

All Australian residents pay the Medicare levy — a 2% tax on taxable income that funds the public healthcare system. But it doesn't stop there. High-income earners without private hospital cover also pay the Medicare Levy Surcharge (MLS) — an additional 1% to 1.5%. Understanding both is essential: sometimes private health insurance (at ~$1,200-$2,000/year) costs LESS than the MLS (which can be $2,000+). This calculator shows you exactly what you owe and whether getting health cover makes financial sense.

Enter Your Details

Enter Your Details

$

Your annual taxable income

Affects MLS thresholds and Medicare levy reduction

Children under 21 or full-time students under 25

The MLS applies to high earners without private hospital cover

$

Your spouse's taxable income for MLS family income calculation

Affects Lifetime Health Cover loading calculations

Real-World Examples

Single Earner Without Health Cover

Jake earns $110,000 and doesn't have private hospital cover.

Medicare levy: $2,200 (2%). MLS at 1.25%: $1,375. Total Medicare-related tax: $3,575. Basic hospital cover would cost ~$1,200-$1,800/year. Jake saves $375-$975 by getting health cover PLUS gets the benefit of actual hospital insurance.

Low-Income Reduction

Maria is a student earning $27,000 from part-time work.

At $27,000, Maria is in the Medicare levy reduction zone ($24,276-$30,345). Her reduced levy is approximately $272 instead of $540. Below $24,276, she'd pay no Medicare levy at all.

Frequently Asked Questions

Glossary

Medicare Levy
A 2% tax on taxable income for all Australian residents to fund the public healthcare system. Most residents pay this; low-income earners may qualify for reduction or exemption.
Medicare Levy Surcharge (MLS)
An additional 1-1.5% levy on high-income earners who don't have compliant private hospital cover. Applies to singles over $93,000 and families over $186,000.
Lifetime Health Cover (LHC)
A government initiative that adds 2% to your private health insurance premium for every year past age 30 that you didn't have hospital cover. The loading is removed after 10 continuous years of cover.
Private Health Insurance Rebate
An income-tested government rebate that reduces the cost of private health insurance premiums. The percentage decreases as income increases.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026

How to Use
  1. Enter your taxable income.
  2. Select your family status (single, couple, or family).
  3. Add the number of dependent children if applicable.
  4. Indicate whether you have private hospital cover.
  5. Enter your spouse's income if applicable.
  6. See your Medicare levy, any MLS, and a private health insurance comparison.
Key Information
  • The Medicare levy is 2% of taxable income for all Australian residents.
  • Low-income individuals pay a reduced levy: $0 below $24,276, phasing in to full 2% at $30,345 (singles, 2024-25).
  • MLS applies to singles earning over $93,000 and families over $186,000 (2024-25) WITHOUT private hospital cover.
  • MLS rates: $93,001-$108,000 = 1%, $108,001-$144,000 = 1.25%, over $144,000 = 1.5%.
Pro Tips
  • If you earn just over $93,000 without hospital cover, basic hospital cover (~$100/month) is often cheaper than the MLS.
  • The MLS uses 'income for surcharge purposes' — includes taxable income, reportable fringe benefits, and super salary sacrifice. You can't salary-sacrifice your way below the threshold.
  • Lifetime Health Cover (LHC) loading adds 2% to your premium for every year you're over 30 without cover. If you're 35, that's 10% extra. Get cover by July 1 after your 31st birthday.
  • Some employers offer corporate health insurance rates — always check before buying individually.
Avoid These Mistakes
  • Not realising the MLS income includes reportable fringe benefits and net investment losses — your actual 'income' for MLS may be higher than taxable income.
  • Thinking any health insurance counts — only compliant HOSPITAL cover satisfies the MLS. Extras-only policies don't count.
  • Ignoring the Lifetime Health Cover loading — delaying private health past 30 permanently increases your premium.
  • Not claiming the Private Health Insurance Rebate — income-tested, but most Australians qualify for some level of rebate.
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