What the Medicare levy surcharge actually is
The Medicare levy surcharge, or MLS, is not the same thing as the ordinary Medicare levy. It is an extra charge that can apply if your income is above the relevant threshold and you or your family do not have an appropriate level of private patient hospital cover for the full period.
This page matters because many people search for “Medicare levy” when they are really asking an MLS question: do I earn enough for the surcharge to apply, and would private hospital cover change the outcome?
Current ATO thresholds for 2025–26
| Tier | Singles | Families | MLS rate |
|---|---|---|---|
| Base | $101,000 or less | $202,000 or less | 0% |
| Tier 1 | $101,001 to $118,000 | $202,001 to $236,000 | 1% |
| Tier 2 | $118,001 to $158,000 | $236,001 to $316,000 | 1.25% |
| Tier 3 | $158,001 and over | $316,001 and over | 1.5% |
For families, the threshold can increase for dependent children after the first. The calculator on this page includes dependant settings so you can test that rather than relying on the base table alone.
How to use the page well
Check income first
Use taxable income plus the relevant MLS-style adjustments already built into the calculator, including reportable fringe benefits and net investment losses where relevant.
Then toggle hospital cover
The most useful comparison is often with and without appropriate private patient hospital cover so you can see whether the surcharge changes.
Keep MLS separate from levy exemptions
If your real question is whether you can reduce or avoid the standard 2% levy, go to the Medicare levy exemption page. That is a different rule set.
Quick example
A single resident with income above $101,000 and no appropriate private patient hospital cover can fall into an MLS tier. The rate then depends on which threshold band the final income lands in. The calculator helps you test whether small changes in pay, sacrifice or family settings change that result.
Source-backed notes
- ATO Medicare levy surcharge income, thresholds and rates is the core source for the current tier tables.
- ATO private health insurance rebate thresholds is useful if you are comparing MLS and private health income bands together.
- ATO Medicare levy exemption covers the separate exemption rules for the ordinary levy.
Frequently asked questions
What is the Medicare levy surcharge?
The Medicare levy surcharge is an extra charge that can apply if your income is above the relevant threshold and you do not have an appropriate level of private patient hospital cover.
What are the current 2025–26 thresholds?
For 2025–26, the ATO says the base tier is up to $101,000 for singles and up to $202,000 for families, with higher surcharge tiers above that.
Is the surcharge the same as the normal Medicare levy?
No. The normal Medicare levy is separate. The surcharge is an additional charge for higher-income earners without the required level of hospital cover.