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Medicare Levy & Medicare Levy Surcharge (MLS) Guide Australia (2026–27)
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- By AussieSpot Team
Medicare levy and surcharge: two separate calculations
The Medicare levy is normally 2% of taxable income. The Medicare levy surcharge (MLS) is an additional charge for higher-income taxpayers without suitable hospital cover. Hospital cover does not remove the ordinary Medicare levy.
Low-income levy reduction
Enacted thresholds applying from 2025–26 onwards are $28,011 for a single taxpayer and $44,268 for a single taxpayer eligible for the seniors and pensioners tax offset. Family thresholds are $47,238, or $61,623 where the applicable seniors/pensioners conditions are met, plus $4,338 per dependent child. These are the enacted amounts used for this 2026–27 estimate; later legislation may index them.
For an ordinary single taxpayer, the levy is the lower of 2% of income and 10% of income above $28,011, with a minimum of zero. At $30,000 income, the levy is $198.90, rather than $600. The full 2% rate applies once the phase-in calculation reaches it, at $35,013.75 in the continuous estimate.
Family calculations need both partners’ information. Our family mode assumes the partner has no income. Special exemptions and partial-year circumstances are not assessed.
2026–27 surcharge tiers
| Rate | Single income | Family income before child adjustment |
|---|---|---|
| 0% | Up to $105,000 | Up to $210,000 |
| 1% | Above $105,000 to $123,000 | Above $210,000 to $246,000 |
| 1.25% | Above $123,000 to $164,000 | Above $246,000 to $328,000 |
| 1.5% | Above $164,000 | Above $328,000 |
Family thresholds increase by $1,500 for each dependent child after the first. Adjusted income, including reportable super contributions and net investment losses, selects the tier. The surcharge itself applies to taxable income plus reportable fringe benefits, apportioned for uncovered days.
For example, a single person with $140,000 taxable income, no add-backs and no qualifying hospital cover for the full year has an estimated MLS of $1,750. The ordinary levy is a separate $2,800.
Comparing hospital cover
Use an actual eligible policy quote and consider excesses, exclusions and personal needs. Premiums shown by the calculator are illustrative assumptions, not market quotes or guaranteed savings. Buying cover later does not remove surcharge for earlier uncovered days.
Sources: Medicare Levy Act, official MLS thresholds. Try the levy calculator or MLS calculator.