How much is the Medicare levy in Australia?

The Medicare levy is 2% of your taxable income for most Australian residents. It funds Australia's public healthcare system (Medicare). Low-income earners may qualify for a reduction or full exemption. For 2025-26, singles earning below $26,000 are exempt, and the levy phases in between $26,000 and $32,500.

What is the Medicare levy surcharge (MLS)?

The Medicare levy surcharge is an additional tax of 1% to 1.5% on top of the standard 2% Medicare levy. It applies to higher-income earners who do not hold private hospital cover. For singles in 2025-26: income $93,001-$108,000 pays 1.0%, $108,001-$144,000 pays 1.25%, and above $144,001 pays 1.5%. Family thresholds are double these amounts plus $1,500 per dependent child after the first.

Can I avoid the Medicare levy surcharge?

Yes. You can avoid the Medicare levy surcharge by taking out private hospital cover (not just extras cover). If you earn above the MLS threshold, the surcharge can cost more than a basic hospital policy — so it's often cheaper to get private health insurance. Compare the annual surcharge amount against the cost of a basic hospital policy to decide.

Do I have to pay the Medicare levy if I earn under $26,000?

No. For 2025-26, if your taxable income is $26,000 or less (single, no dependents), you are fully exempt from the Medicare levy. Between $26,000 and $32,500, you pay a reduced levy that phases in gradually. Above $32,500 you pay the full 2% levy. Family thresholds are higher: $43,846 plus $4,027 per dependent child.

Is the Medicare levy included in PAYG tax?

Yes. Your employer includes the Medicare levy in the PAYG tax withheld from your pay. It's not a separate deduction on your payslip — it's built into the standard tax withholding tables published by the ATO. The Medicare levy surcharge, however, may need to be separately accounted for if applicable.

Medicare Levy Calculator

Calculate your Medicare levy and surcharge for 2025-26. See if you qualify for a reduction, and whether private health insurance would save you money.

Last verified: 1 July 2025

AdvertisementSupports free tools

Get notified when rates change

Free alerts when minimum wage, award rates, or workplace laws are updated.

Free forever. No spam. Unsubscribe anytime.

General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.

Learn more

Medicare Levy Surcharge (MLS): Do You Need Private Health Insurance? (2026)

The Medicare Levy Surcharge costs 1% to 1.5% of your income if you earn over $97,000 (singles) or $194,000 (families) and don't have private hospital cover. Learn the income tiers, how to avoid the MLS, and whether private health insurance is worth it.

Medicare Levy Surcharge 2026: Thresholds, Rates and How to Avoid It

The MLS costs up to 1.5% of your income if you earn over $93,000 without private hospital cover. See 2025-26 thresholds, tier rates, family thresholds, and how to avoid it.

Earning Over $101K? Why Not Having Health Insurance Is Costing You More Than You Think

If you earn over $93,000 and don't have private hospital cover, you're paying up to $2,160 in Medicare Levy Surcharge. A basic hospital policy costs less — and you get cover too.

From the Mate Network

Private Health: Worth It? →

Compare the Medicare Levy Surcharge vs cheapest hospital policies at your income.

Full Tax Breakdown →

See your complete tax including Medicare levy in one calculation.

Medicare Levy Calculator

Learn more

Related Tools

From the Mate Network