The Medicare levy — the basics
The Medicare levy is a 2% tax on your taxable income that helps fund Australia's public healthcare system (Medicare). Most Australian residents pay the levy in addition to income tax. It is calculated separately from your income tax and appears as a separate line item on your tax assessment.
Low-income exemption and reduction
If your taxable income is below $26,000 (the reduction threshold for 2025-26), you pay a reduced Medicare levy or no levy at all. Between $26,000 and $32,500 (the shade-in range), the levy phases in at a rate of 10% of the excess over $26,000. Above $32,500, you pay the full 2%.
Medicare Levy Surcharge (MLS)
The MLS is an additional 1% to 1.5% tax on top of the standard Medicare levy. It applies to singles earning over $101,000 (or families over $202,000) who do not hold private hospital cover from a registered health insurer.
| Taxable income (singles) | MLS rate |
|---|---|
| $0 – $100,999 | 0% |
| $101,000 – $117,999 | 1.0% |
| $118,000 – $157,999 | 1.25% |
| $158,000+ | 1.5% |
Calculate your Medicare levy
The Pay Calculator calculates both the standard Medicare levy and the MLS based on your income and private health status.