Medicare Levy Surcharge Calculator
Cover or Pay the Surcharge?
Work out whether you pay the Medicare levy surcharge in 2026-27, how much it costs you and your partner, and whether a hospital policy is cheaper once the rebate is taken off.
Read the full answer — method, rates and figures
Quick answer: For 2026-27 the Medicare levy surcharge is 1%, 1.25% or 1.5% for Australians without an appropriate level of private hospital cover whose income for MLS purposes is above $105,000 (single) or $210,000 (family, plus $1,500 for each dependent child after the first). Tier 1 runs to $123,000 single / $246,000 family, Tier 2 to $164,000 / $328,000, and Tier 3 is above that.
The surcharge is charged on your taxable income plus reportable fringe benefits. A single person on $120,000 pays $1,200 a year; a hospital policy quoted at $1,500 costs $1,259 after the 16.079% rebate, so for them cover is $59 dearer than the surcharge and breaks even at a $1,430 premium.
Source: ATO, thresholds and rebate rates updated 22 June 2026, checked 25 September 2026.
Do I have to pay the Medicare levy surcharge?
Only if you have no appropriate private hospital cover and your income for MLS purposes is above $105,000 (single) or $210,000 (family) in 2026-27. A single person on $120,000 pays $1,200.
Your tier
Tier 1
Surcharge without cover
$1,200
Cover after rebate
$1,259
Cover costs extra
$59
Income for MLS purposes of $120,000 puts you in Tier 1: without cover the surcharge is $1,200. This policy costs $1,259 after the 16.079% rebate, so it is $59 dearer than the surcharge. Any hospital premium below $1,430 a year before the rebate beats the surcharge.
To count, the policy's excess must be $750 or less and it must cover everyone in the family.
For how the surcharge, the rebate and the Lifetime Health Cover loading fit together, read the private health insurance guide. To see the surcharge inside your full tax bill, use the income tax calculator; salary packaging adds reportable fringe benefits, which the novated lease calculator reports.
Last reviewed 25 September 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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Your tier comes from your income for MLS purposes (combined with your partner's if you are in a couple) against the single or family thresholds. The surcharge rate for that tier is then charged on each person's taxable income plus reportable fringe benefits — not on the net investment losses or super contributions, which only count towards the tier.
In a couple, a partner whose own income for MLS purposes is $28,011 or less pays nothing. The hospital policy is compared after the government rebate for your tier and the age of the oldest person covered, weighted by the months each rebate rate applies in the year, plus any Lifetime Health Cover loading (2% for each year you were over 30 on the 1 July before you first took out hospital cover, capped at 70%), to which the rebate does not apply.
Figures from the ATO's surcharge and rebate pages (updated 22 June 2026), the Medicare Levy Act 1986 (s 8D, spouse exemption) and privatehealth.gov.au (LHC loading), checked 25 September 2026. The calculator assumes a full year with the same family status and no cover; part-year cover or a change of partner is worked out by days.
Medicare levy surcharge thresholds and rebate, 2026-27
| Tier | Single | Family | MLS | Rebate |
|---|---|---|---|---|
| Base tier | $105,000 or less | $210,000 or less | 0% | 24.118% |
| Tier 1 | $105,001 – $123,000 | $210,001 – $246,000 | 1% | 16.079% |
| Tier 2 | $123,001 – $164,000 | $246,001 – $328,000 | 1.25% | 8.038% |
| Tier 3 | $164,001 or more | $328,001 or more | 1.5% | 0.000% |
Rebate shown for the age band selected, averaged over the year: 1 Jul 2026 – 31 Mar 2027; 1 Apr 2027 – 30 Jun 2027 (not yet published — assumed unchanged).
How the surcharge works for couples and families
A couple's tier is set by their combined income. Take a couple with two children on $130,000 and $90,000: $220,000 together is above the $211,500 family threshold for two children, which puts them in Tier 1. Without hospital cover each pays 1% of their own income — $1,300 and $900, $2,200 in all. A single parent uses the family thresholds on their own income. Children's income never counts.
How to use this calculator
- Choose the income year and whether you are single, in a couple, or a single parent (with the number of dependent children).
- Enter your taxable income plus reportable fringe benefits, and any net investment losses and reportable super contributions — and your partner's, if you have one.
- Enter the yearly premium of a hospital policy you are considering, before the rebate, and your Lifetime Health Cover loading if you have one.
- Read your tier, the surcharge you would pay without cover, and whether the policy costs more or less than the surcharge after the rebate.
❓ Frequently Asked Questions
What are the Medicare levy surcharge thresholds for 2026-27?
Singles: no surcharge up to $105,000; 1% from $105,001 to $123,000; 1.25% from $123,001 to $164,000; 1.5% above $164,000. Families (a couple, or a single parent): $210,000, $246,000 and $328,000, each raised by $1,500 for every dependent child after the first.
The thresholds rose from 1 July 2026; for 2025-26 the single base was $101,000.
What income is the Medicare levy surcharge based on?
Two different figures. Whether you pay, and at what rate, depends on your income for MLS purposes: taxable income plus reportable fringe benefits, total net investment losses (net rental and financial investment losses) and reportable super contributions (reportable employer contributions such as salary sacrifice, plus deductible personal contributions) — combined with your spouse's if you have one.
The surcharge itself is then charged only on your taxable income plus reportable fringe benefits (and any amount taxed as family trust distribution tax).
Does my partner have to pay the surcharge too?
If your combined family income is above the family threshold and neither of you holds appropriate hospital cover, each of you pays the surcharge on your own taxable income plus reportable fringe benefits, at the family tier's rate. The ATO's exception: a spouse for the full year whose own income for MLS purposes is $28,011 or less pays no surcharge.
That figure is set in the Medicare Levy Act 1986 (s 8D) and was raised by Act No. 58 of 2026; some ATO pages still show the old $27,222. For 2026-27 the calculator uses the current statutory figure until any change is legislated.
If you had a spouse for only part of the year, the surcharge is worked out by days.
What counts as appropriate private hospital cover?
Hospital cover from a registered Australian health insurer with an excess of $750 or less for a single policy, or $1,500 or less for a couple or family policy. Extras (general treatment) cover does not count, and nor does travel insurance or cover from an overseas fund.
Everyone in the family — you, your spouse and your dependent children — must be covered for you to avoid the surcharge; for any days without cover it applies pro rata.
Is it cheaper to get private health insurance or pay the surcharge?
It depends on your income and the premium. Compare the surcharge you would pay with the premium after the government rebate plus any Lifetime Health Cover loading.
At $120,000 single the surcharge is $1,200, so any hospital policy with a pre-rebate premium below $1,430 is the cheaper option. The rebate falls as income rises (it is nil in Tier 3) while the surcharge rises, so the higher your income, the more hospital cover wins on cost alone.
What is the private health insurance rebate for 2026-27?
The rebate uses the same income tiers as the surcharge. From 1 July 2026 to 31 March 2027, for policies where the oldest person covered is under 65, it is 24.118% (base tier), 16.079% (Tier 1), 8.038% (Tier 2) and nil in Tier 3; it is higher at 65-69 and 70 and over.
It does not apply to any Lifetime Health Cover loading. The rates from 1 April 2027 are published in March 2027; until then the calculator assumes they are unchanged.
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