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Low income can reduce the levy
Below the applicable low-income threshold, the ordinary Medicare levy can be zero. In the phase-in range it rises gradually, rather than jumping straight to 2% of income.
The family calculation can depend on both partners’ taxable incomes and dependent children. It is not the same as applying a family threshold to one person’s salary. Enter partner income if you use the family setting.
How the single-person phase-in works
At $29,000 of taxable income, the ordinary levy is 10% of the $989 above the low-income threshold: $98.90. It is not yet the full $580 that 2% of taxable income would produce.
The table starts from taxable income, so it does not subtract the standard work deduction again. It uses the latest legislated ordinary single thresholds; family, senior and exemption rules can change the answer.
| Taxable income | Levy under phase-in rule | 2% for comparison |
|---|---|---|
| $28,011 | $0.00 | $560.22 |
| $29,000 | $98.90 | $580.00 |
| $30,000 | $198.90 | $600.00 |
| $35,014 | $700.28 | $700.28 |
An exemption is not just a preference
Full or partial exemptions depend on your circumstances, such as qualifying medical conditions, some foreign resident periods or entitlement to Medicare benefits. Supporting information or a Medicare entitlement statement may be needed.
The full-year checkbox should only be used when a full-year exemption applies. The tool does not calculate part-year exemption days. Senior and pensioner thresholds and the seniors and pensioners tax offset are also outside this salary-only estimate.
Do not confuse exemption with insurance
Private hospital cover generally does not remove the ordinary Medicare levy. It relates to the separate surcharge, which has its own income tests and cover requirements.
An exemption from the levy is not automatically an exemption from every surcharge situation, especially where dependants are involved. Check the ATO guidance for the household before assuming both charges disappear.
Sources you can check
Sources checked for this page on 3 October 2026. Statistics keep their own measurement dates.