Tax and rebates for health insurance
What is the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is a surcharge applied to people who don’t have an appropriate level of hospital cover and earn over $101,000 as a single or over $202,000 as a couple/family*.
The surcharge is designed to encourage Australians to get hospital cover and use private hospitals to reduce demand on the public health system. Income thresholds for the private health insurance rebate update on July 1 every year and can be viewed on the Australian Government Website. You can avoid this surcharge by getting hospital cover. It's good to note that the cost of the Medicare Levy Surcharge often exceeds the cost of getting hospital cover.
Medicare Levy Surcharge Calculator
Without hospital cover, your estimated surcharge is
This is a guide only. You should speak to a financial advisor who will be able to take into account your income and personal situation, including any changes that occur during a tax year.
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How the Medicare Levy Surcharge works
Medicare Levy Surcharge thresholds
Learn more about how the MLS is calculated on the ATO website.
*Single parents and couples (including de facto couples) are subject to family tiers. If you have more than one child, your family income threshold increases by $1,500 for each child after your first. The income thresholds are indexed annually and are updated each year on 1 July.
| Income thresholds from 1 July 2025 - 30 June 2026 | ||||
|---|---|---|---|---|
| Base Tier | Tier 1 | Tier 2 | Tier 3 | |
| Singles |
$101,000 or less |
$101,001 – $118,000 |
$118,001 – $158,000 |
$158,001 or more |
| Families |
$202,000 or less |
$202,001 – $236,000 |
$236,001 – $316,000 |
$316,001 or more |
| Medicare Levy Surcharge |
0% |
1% |
1.25% |
1.5% |
| Income thresholds from 1 July 2024 - 30 June 2025 | ||||
|---|---|---|---|---|
| Base Tier | Tier 1 | Tier 2 | Tier 3 | |
| Singles |
$97,000 or less |
$97,001 – $113,000 |
$113,001 – $151,000 |
$151,001 or more |
| Families |
$194,000 or less |
$194,001 – $226,000 |
$226,001 – $302,000 |
$302,001 or more |
| Medicare Levy Surcharge |
0% |
1% |
1.25% |
1.5% |
Medicare Levy Surcharge explained
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