Medicare Levy Surcharge Calculator

🇦🇺 2025–26 & 2026–27 thresholds

Australia Medicare Levy Surcharge Calculator

Find out if you'll pay the MLS — and whether private hospital cover would actually cost you less.

The Medicare Levy Surcharge (MLS) is an extra 1% to 1.5% tax on higher-income Australians who don't hold private hospital cover. It's charged on your entire income for MLS purposes — not just the amount above the threshold — so crossing a tier by a single dollar can cost over a thousand dollars. For 2025–26 the surcharge starts at $101,000 for singles and $202,000 for families; from 1 July 2026 those thresholds rise to $105,000 and $210,000. This calculator works out your tier, your surcharge, and whether basic hospital cover would have been the cheaper option.

Income year
Who are you assessed as?
$
Enter your taxable income for the year.
Please enter an income to calculate your surcharge.
› Add fringe benefits, super or investment losses (optional)
$
$
$
Added back for MLS — enter as a positive number.
Your Medicare Levy Surcharge for 2025–26
$0
Annual surcharge payable.
Income for MLS
$0
Your tier
Base
Surcharge rate
0%
Ad slot — in-content / native
!

Missing income figure

Please enter your income before calculating — it's the required field.

How the Medicare Levy Surcharge is calculated

The MLS is a flat percentage applied to your whole income for MLS purposes once you cross a threshold without private hospital cover. Unlike income tax, it isn't marginal — the rate hits every dollar, which is why it's often called a "cliff." There are three surcharge tiers above the base, charging 1%, 1.25% and 1.5%.

The MLS formula
Income for MLS = taxable income + fringe benefits + reportable super + net investment losses
If income ≤ base threshold OR you hold hospital cover → MLS = $0
Otherwise → MLS = income for MLS × tier rate (1% / 1.25% / 1.5%)
Worked example — single on $130,000 (2025–26), no cover: $130,000 sits in Tier 2, so MLS = 1.25% × $130,000 = $1,625 for the year.

2025–26 and 2026–27 thresholds

Tier (single)2025–262026–27Rate
Base (no MLS)≤ $101,000≤ $105,0000%
Tier 1$101,001–$118,000$105,001–$123,000*1%
Tier 2$118,001–$158,000$123,001–$164,000*1.25%
Tier 3$158,001+$164,001+*1.5%

Family thresholds are double the single figures and rise by $1,500 per dependent child after the first. *2026–27 base thresholds ($105,000 / $210,000) are confirmed; the upper-tier boundaries are an indexation projection pending final ATO publication.

What counts as income for MLS purposes

This is broader than your salary. The ATO adds your taxable income, reportable fringe benefits (a company car or novated lease counts here), reportable super contributions, and total net investment losses including negatively geared rental properties. A salary-packaged car or an investment loss can push you over a threshold even when your base pay sits under it.

Cover almost always beats the surcharge

For most people over the threshold, basic private hospital cover costs less than the MLS they'd otherwise pay — and unlike the surcharge, you get something for your money. One nuance: one personal deductible super contribution that drops your income below the threshold can wipe the MLS entirely. Model that trade-off with the salary sacrifice calculator and check the flow-on to your income tax and take-home pay. If you have a study debt, note that the same income measures feed your HECS repayment.

Related calculators

Ad slot — in-content / native

Frequently asked questions

What is the Medicare Levy Surcharge threshold for 2025–26?+
For 2025–26 the MLS starts at $101,000 for singles and $202,000 for families. Below that, you pay no surcharge. From 1 July 2026 the thresholds rise to $105,000 for singles and $210,000 for families. The family threshold increases by $1,500 for each dependent child after the first.
Is the surcharge charged on my whole income or just the part above the threshold?+
Your whole income for MLS purposes. The MLS is not marginal like income tax — once you cross a tier without hospital cover, the rate (1%, 1.25% or 1.5%) applies to every dollar of your MLS income. This "cliff" is why being just over a threshold can be expensive.
How do I avoid paying the MLS?+
Hold an eligible private hospital policy with a registered Australian insurer for the full year, with an excess no greater than $750 for singles or $1,500 for couples/families. Alternatively, reducing your income below the threshold — for example through a deductible personal super contribution — can also remove the surcharge.
Does extras-only or "ambulance" cover count?+
No. Only hospital cover exempts you from the MLS. Extras (general treatment) policies, ambulance-only cover, and overseas or non-registered insurance do not qualify, no matter how comprehensive they are.
What income does the MLS use — is it just my salary?+
It's your income for MLS purposes: taxable income plus reportable fringe benefits, reportable super contributions, and net investment losses (including negatively geared property). It's usually higher than the taxable income on your notice of assessment, and for couples it's the combined figure.
I only had cover for part of the year — what happens?+
The MLS is applied on a daily basis. You pay the surcharge for each day you were over the threshold without eligible hospital cover. So a few uncovered months still trigger a proportional surcharge. This calculator assumes either full-year cover or none.
We're a couple — whose income counts?+
Couples and families are assessed on their combined income for MLS purposes against the family threshold. If your combined income is over the family threshold, both partners and all dependents must be covered to avoid the surcharge. One exception: if your own MLS income is $27,222 or less, you aren't personally liable even if the family is over.
This calculator provides general estimates only and is not financial or tax advice. The 2025–26 thresholds are as published by the ATO; the 2026–27 base thresholds are confirmed but the upper-tier boundaries shown are an indexation projection pending final ATO publication. The MLS is applied daily in practice and other concessions may apply. Confirm your position with the ATO or a registered tax agent.

Scroll to Top