Medicare Levy Surcharge Calculator 2026-27
Use this medicare levy surcharge calculator to see what skipping hospital cover costs you this year — or, if you’re covered, the rebate tier the government pays on your premiums.
Last updated: July 2026 · privatehealth.gov.au (Commonwealth Ombudsman) · FY 2026–27
Got your number? Two things worth checking next
→ The full tiers table — every threshold, rate and rebate percentage side by side. → Your full take-home pay — income tax and the standard 2% levy, computed for your salary.What is the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is an extra tax of 1% to 1.5% of your income, charged on top of the ordinary 2% Medicare levy, if you earn above the threshold and don’t hold private hospital cover. It exists for exactly one reason: to make skipping private insurance more expensive than buying it for higher earners, easing pressure on the public system. Extras-only policies (dental, optical, physio) don’t count — only hospital cover from a registered Australian insurer exempts you.
For 2026–27 the surcharge starts at $105,000 for singles and $210,000 for couples and families (plus $1,500 per dependent child after the first). The income tested is your income for MLS purposes — taxable income plus reportable fringe benefits, reportable super contributions and net investment losses — so salary-sacrificing doesn’t dodge it. For families it’s the combined income, and everyone on the policy (you, partner, dependents) must be covered to escape the surcharge.
The arithmetic that decides most people: at $115,000 the surcharge is $1,150 a year of pure tax that buys nothing. A basic hospital policy at that income — after the 16.079% Tier 1 rebate — frequently costs about the same or less, and actually covers you. That’s the comparison this calculator sets up; whether a given policy is worth its price is then a shopping question, best answered with the government’s own comparison tool at privatehealth.gov.au.
The 2026–27 Tiers This Calculator Uses
| Tier | Singles | Families | MLS | Rebate (<65) |
|---|---|---|---|---|
| Base | ≤ $105,000 | ≤ $210,000 | 0% | 24.118% |
| Tier 1 | $105,001–123,000 | $210,001–246,000 | 1.0% | 16.079% |
| Tier 2 | $123,001–164,000 | $246,001–328,000 | 1.25% | 8.038% |
| Tier 3 | ≥ $164,001 | ≥ $328,001 | 1.5% | 0% |
Verified against privatehealth.gov.au for 1 July 2026 – 30 June 2027. Older ages get higher rebates — the full grid is on our tiers table. Rebate percentages adjust every 1 April; thresholds move each 1 July.
Frequently Asked Questions
I only had cover for part of the year — do I pay the full surcharge?
No — the surcharge is prorated by the days you were uncovered. Buy hospital cover in January and you’ll pay MLS only for July–December. The flip side: you can’t dodge it by buying cover in June; the uncovered months still get surcharged at tax time.
Does extras cover (dental, optical) save me from the MLS?
No. Only hospital cover with a registered Australian insurer counts. An extras-only policy leaves you fully exposed to the surcharge — a common and expensive misunderstanding for people who “have health insurance” through a cheap extras plan.
My partner earns very little — are we still tested as a family?
Yes — couples (including de facto) are tested on combined income against the family thresholds, and each person on the policy needs hospital cover — one covered spouse doesn’t shelter the other. A very-low-earning partner may have their own exemption at tax time (the ATO applies an individual income floor), but the family tier is set by the combined number.
Is buying cover always cheaper than paying the surcharge?
Not always — it depends on your tier and the policy. At Tier 1 the comparison is often close; by Tier 3 (1.5% of $164,000+ is $2,460+, with no rebate) basic hospital cover usually wins clearly. Beware buying the cheapest possible “junk” policy purely for tax: it works arithmetically, but you’re paying real money for cover you’d never use — compare what you actually get first.
Also in Australia:
📋 Rates verified — Official sources: privatehealth.gov.au — Medicare Levy Surcharge · privatehealth.gov.au — Insurance Rebate
⚠️ This is general information, not financial, tax or legal advice. KnowMyGovt is an independent service with no affiliation with or endorsement by the Private Health Insurance Ombudsman, the ATO or the Australian Government, and is not responsible for decisions you make based on it.
