Medicare Levy Calculator
Calculate your Medicare levy (2%) and check if the Medicare levy surcharge applies based on your income and private health cover.
Disclaimer
This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.
Frequently Asked Questions
Who is exempt from the Medicare levy?
What is the Medicare Levy Surcharge?
What is Medicare Levy?
The Medicare levy is a 2% tax on your taxable income that helps fund Australia's public healthcare system, Medicare. Most Australian taxpayers pay it, though low-income earners may be exempt or pay a reduced rate.
How this calculator works
The calculator applies the 2% Medicare levy to your taxable income. If you earn below $26,000, you're fully exempt. Between $26,000 and $32,500, a reduced rate applies (10% of the excess over $26,000, or shade-in). It also calculates the Medicare Levy Surcharge (MLS) — an additional 1-1.5% charged to higher-income earners ($93,000+ single, $186,000+ family) who don't hold private hospital cover. The surcharge comparison helps you decide whether private health insurance is cheaper than paying the MLS.
Medicare Levy Basics
The Medicare Levy funds Australia's public healthcare system (Medicare). Standard rate: 2% of taxable income. Indexed annually. Most taxpayers earning above the lower threshold pay it automatically via PAYG withholding. Exemptions apply for some foreign residents, defence force members, and people with medical exemptions issued by Medicare or DVA.
Low-Income Reduction (Shade-In)
For FY 2025-26 (indexed annually): Singles full exemption below $27,222, shade-in to $34,027. Family threshold: $45,907 plus $4,216 per child. The 'shade-in' is a 10% phase-in rate on income above the lower threshold. Example: single earning $30,000 → levy = 10% × ($30,000 - $27,222) = $278, not the full 2% = $600.
Medicare Levy Surcharge (MLS)
Extra 1-1.5% surcharge for high-income earners WITHOUT private hospital cover. 2025-26 thresholds (singles): $101,001 → 1.0%, $118,001 → 1.25%, $144,001 → 1.5%. Family thresholds double ($202k/$236k/$288k) plus $1,500 uplift per dependent child after the first. Effective on income for the WHOLE year if you lacked PHI for any part — fractional liability based on days.
Should You Get Private Hospital Cover?
Cheapest basic hospital policies start around $1,000-$1,500/yr. If you earn over $101k single ($202k family), the MLS at minimum ($1,010/$2,020 respectively) probably exceeds basic PHI cost. Even at $100k, you may break even. Important: PHI must be HOSPITAL cover (not just extras) to avoid MLS, and Lifetime Health Cover Loading applies if you take it out after age 31 (2% extra premium per year of delay).
Senior and Pensioner Concessions
Senior Australians and Pensioner Tax Offset (SAPTO) recipients get a higher Medicare Levy exemption: $43,020 single shade-in to $53,775 (FY 2025-26). For seniors, the lower threshold for the levy applies before the SAPTO income test, meaning seniors with modest pensions often have zero Medicare Levy.
Indexation Updates
Medicare Levy lower thresholds indexed annually with CPI changes — usually 2-4% increases. Family threshold updates each February in the Federal Budget review. Calculator uses FY 2025-26 figures as published in MYEFO 2024. Always check ato.gov.au for the latest year's exact thresholds before lodging.
Official Sources
All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.
Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.