Medicare Levy Surcharge Calculator (2026–27 and 2025–26)
Whether you owe the 1–1.5% Medicare Levy Surcharge without private hospital cover in 2026–27 or 2025–26 — your tier from single or family income, the surcharge for the days you were uncovered, and whether hospital cover after the rebate and any LHC loading would cost less.
How it works
MLS = 1% / 1.25% / 1.5% of (taxable income + reportable fringe benefits) × days uncovered ÷ 365, when income for MLS purposes is above $105,000 / $123,000 / $164,000 in 2026–27 ($101,000 / $118,000 / $158,000 in 2025–26). Families: double, + $1,500 per child after the first · Cover cost = premium × (1 + LHC loading) − rebate % × premium
The Medicare Levy Surcharge pushes higher earners towards private hospital insurance. If you, your spouse and your dependants do not hold appropriate hospital cover, you pay an extra 1%, 1.25% or 1.5% on top of the 2% Medicare levy. The tier is set by your income for MLS purposes. That is taxable income plus reportable fringe benefits, reportable super contributions (salary sacrifice and deductible personal contributions), net investment losses and exempt foreign employment income. A family is tested on the partners’ combined income against double the single threshold, plus $1,500 for each dependent child after the first. Thresholds rose from 1 July 2026 to $105,000 for singles and $210,000 for families. Once you are over a threshold, the rate applies to your whole taxable income and fringe benefits, not just the excess. It is charged only for the days you were uncovered. Basic hospital cover often costs less than the surcharge, especially after the private health insurance rebate (about 16% in tier 1 for under-65s). That is why the calculator compares the two for the same days, allowing for any Lifetime Health Cover loading, and shows the most a policy can cost before the surcharge becomes the cheaper option.
Worked example
A single on $115,000 in 2026–27 is in tier 1 (over $105,000), so the surcharge is 1% × $115,000 = $1,150 for a full year without cover. Hospital cover at $1,300 less the 16.079% rebate costs $1,090.97, so cover is $59 cheaper. Any policy up to $1,370 a year before the rebate would beat the surcharge. In 2025–26 the same person was also in tier 1 (over $101,000), with a blended rebate of about 16.16% (16.192% to 31 March 2026, 16.079% after).
Sources: ATO — Medicare levy surcharge income, thresholds and rates · ATO — Income thresholds and rates for the private health insurance rebate · privatehealth.gov.au — Medicare Levy Surcharge
Frequently asked questions
Does extras cover count?
No. Only hospital cover from a registered health insurer avoids the surcharge, and its excess must be no more than $750 for singles or $1,500 for families and couples. Extras-only (general treatment) cover and overseas visitor policies do not count.
What income is used for the surcharge?
For the threshold test: taxable income plus reportable fringe benefits, reportable super contributions, net investment losses and exempt foreign employment income (plus your partner’s for a family). The surcharge itself is charged only on taxable income and reportable fringe benefits, which is why salary sacrifice into super does not get you under the threshold. Turn on “Enter income by component” to see both figures.
What if I only had cover for part of the year?
You pay the surcharge only for the days without appropriate cover. Enter the number of uncovered days; the calculator scales both the surcharge and the cover cost to those days. Suspending a policy while travelling does not count as covered.
What is Lifetime Health Cover loading?
A loading of 2% of the premium for every year over age 30 that you go without hospital cover, up to 70%. It is removed after 10 years of continuous cover. The rebate does not apply to the loading, so it can make cover dearer than the surcharge. Enter your loading under More options.
What are the 2026–27 thresholds?
Singles: $105,000 or less pays nothing, then 1% to $123,000, 1.25% to $164,000 and 1.5% above. Families: $210,000, $246,000 and $328,000, each plus $1,500 for every dependent child after the first. For 2025–26 they were $101,000, $118,000 and $158,000 for singles.
Related calculators
Uses ATO Medicare levy surcharge thresholds and private health insurance rebate percentages for 2025–26 and 2026–27 (residents). Exemptions, the family low-income rules and family trust distribution amounts are not modelled. Confirm with the ATO or a registered tax agent. Educational estimate, not tax advice.