Medicare Levy Calculator
Thresholds, Family Reduction and Exemptions 2025-26
Work out your Medicare levy with the 2025-26 low-income, senior and family thresholds, and whether you qualify for an exemption.
Read the full answer — method, rates and figures
Quick answer: The Medicare levy is 2% of your taxable income, on top of income tax. In 2025-26 a single person pays nothing at or below $28,011; between $28,011 and $35,013 the levy is 10 cents for each dollar above $28,011, and above $35,013 the full 2% applies.
Seniors and pensioners entitled to SAPTO use $44,268 and $55,335. Families are tested on combined income: no levy up to $47,238, plus $4,338 for each dependent child ($61,623 for SAPTO couples).
A couple with 2 children pays no Medicare levy until their combined taxable income passes $55,914, and pays a reduced levy up to $69,892. A sole parent of 2 on $50,000 pays $0 instead of $1,000.
Foreign residents, people with a Medicare Entitlement Statement and some medical categories are exempt. The 2026-27 thresholds are not yet set.
Source: Medicare Levy Act 1986 s 8 and ATO Medicare levy pages, read 1 October 2026.
What is the Medicare levy threshold in 2025-26?
Single: no levy up to $28,011, reduced levy to $35,013, then 2%. Seniors (SAPTO): $44,268 and $55,335. Families: $47,238 of combined income plus $4,338 per dependent child.
Medicare levy
$608.60
Full 2% would be
$1,000.00
You save
$391.40
Effective rate
1.22%
Family reduction applies. Family income $65,000 against a family threshold of $55,914 (reduced levy up to $69,892). Your Medicare levy is $608.60 on $50,000, against $1,000.00 at the full 2%. 2025-26 thresholds.
Last reviewed 1 October 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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Single: nil up to the lower threshold, then 10% of the income above it, capped at 2% of the whole income (the cap bites at the upper threshold, which is the lower threshold × 1.25). Couples and sole parents: if combined taxable income is at or under the family threshold ($47,238 + $4,338 per dependent child, $61,623 base with SAPTO) there is no levy. Above it, your own levy is reduced by 2% of the family threshold less 8% of the family income above it; where your spouse would also pay levy, that reduction is cut by your spouse's share of family income (Medicare Levy Act 1986 s 8). This formula reproduces the ATO's own worked examples to the cent. A half exemption is shown as half the levy. Not modelled: the Medicare levy surcharge, part-year exemptions, the transfer of an unused reduction to your spouse, SAPTO eligibility itself, and the family-tax-benefit condition for a sole parent's per-child increase.
Medicare levy thresholds 2025-26
| Who | No levy up to | Reduced levy up to |
|---|---|---|
| Single | $28,011 | $35,013 |
| Single, entitled to SAPTO | $44,268 | $55,335 |
| Family (combined income), no children | $47,238 | $59,047 |
| Family, 2 dependent children | $55,914 | $69,892 |
| Family, entitled to SAPTO | $61,623 | $77,028 |
| Each extra dependent child | +$4,338 | +$5,423 |
Medicare Levy Act 1986 s 8 and ATO "Medicare levy reduction" pages (updated 30 June 2026), read 1 October 2026. If your SAPTO entitlement falls to nil before the upper threshold, the non-SAPTO thresholds apply. 2026-27 thresholds not yet set.
Medicare levy at common incomes: single vs sole parent vs single-income family
Levy payable in 2025-26, no SAPTO, no exemption. The family columns assume one earner, so the combined income equals the income shown.
| Taxable income | Single | Sole parent, 2 kids | Couple, 2 kids | Full 2% |
|---|---|---|---|---|
| $30,000 | $199 | $0 | $0 | $600 |
| $40,000 | $800 | $0 | $0 | $800 |
| $50,000 | $1,000 | $0 | $0 | $1,000 |
| $60,000 | $1,200 | $409 | $409 | $1,200 |
| $70,000 | $1,400 | $1,400 | $1,400 | $1,400 |
| $80,000 | $1,600 | $1,600 | $1,600 | $1,600 |
Medicare levy exemption: who does not pay
A full exemption applies to foreign residents for tax purposes, and to temporary residents who hold a Medicare Entitlement Statement from Services Australia showing they were not entitled to Medicare benefits, but only if every dependant (including a spouse) is also exempt. Applications open on 1 July and can take up to 8 weeks, so apply before you lodge. Members of a diplomatic mission or consular post who are not Australian citizens are also exempt. Under the medical category, blind pensioners and people entitled to full free treatment through Defence Force arrangements or a Veterans' Affairs Gold Card get a full exemption, or a half exemption if a dependant is neither exempt nor paying the levy.
The levy, the surcharge and your tax bracket
The levy sits on top of income tax, which is why the real rate on the next dollar is higher than the bracket rate: see the Australian tax brackets table. Higher earners without private hospital cover can also owe the separate surcharge; the Medicare levy surcharge calculator compares it with the cost of cover. For the full tax on a salary, use the income tax calculator, and for the return you lodge now, the tax return calculator.
How to use this calculator
- Choose single, couple, or sole parent.
- Enter your taxable income, and your spouse's if you have one.
- Enter the number of dependent children and whether you get the seniors and pensioners tax offset (SAPTO).
- Pick an exemption if you have one, and read your levy against the full 2%.
❓ Frequently Asked Questions
What is the Medicare levy low-income threshold for 2025-26?
$28,011 for a single person (upper threshold $35,013), and $44,268 (upper $55,335) if you are entitled to the seniors and pensioners tax offset. For families the threshold is $47,238 of combined taxable income plus $4,338 per dependent child, or $61,623 for SAPTO couples.
The 2026-27 figures are usually set in the following May Budget and applied back to 1 July.
How is the Medicare levy reduction calculated?
Below the lower threshold you pay nothing. Above it you pay 10 cents for every dollar over the threshold until that reaches 2% of your whole income, which happens at the upper threshold.
Example: a single person on $29,011 pays $100.00, not $580.22. Families get a reduction worked out on combined income and shared between the spouses in proportion to their incomes.
The ATO applies it automatically when you lodge.
Who is exempt from the Medicare levy?
Foreign residents for tax purposes; temporary residents with a Medicare Entitlement Statement from Services Australia (and whose dependants are also exempt); members of a diplomatic or consular post who are not Australian citizens; and, under the medical category, blind pensioners and people entitled to full free treatment through Defence Force arrangements or a Veterans' Affairs Gold Card. A medical exemption can be full or half depending on your dependants.
Do I pay the Medicare levy if my spouse earns little?
The family threshold looks at your combined taxable income, so a low-earning spouse can bring a household under $47,238 (plus $4,338 per child) and remove the levy entirely. If your spouse would not pay the levy on their own income, the whole family reduction goes against your levy; if they would, it is split in proportion to your incomes.
Is the Medicare levy the same as the Medicare levy surcharge?
No. The levy is the 2% almost every resident taxpayer pays. The surcharge is an extra 1% to 1.5% charged only on higher earners who do not hold private hospital cover.
Low-income reductions and exemptions here apply to the levy; the surcharge has its own income tests.
When will the 2026-27 Medicare levy thresholds be announced?
Normally in the federal Budget in May, applied back to 1 July 2026. Until then this calculator uses the 2025-26 thresholds, which is also what the return you lodge now uses.
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