Find out whether you will pay the Medicare levy surcharge (MLS) in 2026–27 and how much it costs if you don’t hold private hospital cover. A single person with taxable income of $110,000 is in Tier 1 and pays $1,100 (1%) for a full year without cover. At $105,000 or less a single pays nothing, and a couple or family pays nothing up to $210,000 of combined income.
Medicare Levy Surcharge Calculator
2026–27 income thresholds and tiers · Updated 13 October 2026
- Income for MLS purposes
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- Surcharge-free threshold
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- Tier and rate
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- Distance from the threshold
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- Your surcharge
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- Partner’s surcharge
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- Hospital cover compared
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Paid on top of the 2% Medicare levy. The surcharge applies to taxable income plus reportable fringe benefits for the days you had no appropriate private hospital cover.
MLS thresholds and rates for 2026–27
The thresholds are higher for 2026–27 than for 2025–26. Each tier is based on your income for MLS purposes (and your partner’s, if you have one).
| Base tier | Tier 1 | Tier 2 | Tier 3 | |
|---|---|---|---|---|
| Singles | $105,000 or less | $105,001 – $123,000 | $123,001 – $164,000 | $164,001 or more |
| Families | $210,000 or less | $210,001 – $246,000 | $246,001 – $328,000 | $328,001 or more |
| Surcharge rate | 0% | 1% | 1.25% | 1.5% |
| Base tier | Tier 1 | Tier 2 | Tier 3 | |
|---|---|---|---|---|
| Singles | $101,000 or less | $101,001 – $118,000 | $118,001 – $158,000 | $158,001 or more |
| Families | $202,000 or less | $202,001 – $236,000 | $236,001 – $316,000 | $316,001 or more |
How the surcharge is calculated
- Income for MLS purposes decides your tier. It is your taxable income plus reportable fringe benefits, total net investment losses (shares and rental property) and reportable super contributions (employer salary sacrifice and personal deductible contributions). For couples, both partners’ amounts are added together.
- The rate is then applied to your taxable income plus reportable fringe benefits (and any amount on which family trust distribution tax was paid), not to the investment losses or super contributions.
- Part years: you pay only for the days that you, your partner or a dependent child had no appropriate private hospital cover, so the annual amount is multiplied by those days ÷ 365.
- Couples: if your combined income is over the family threshold, each partner pays on their own income. A partner whose own income for MLS purposes is $28,011 or less (the figure in the ATO’s 2025–26 tax return instructions) pays nothing.
Worked examples
| Situation | Income for MLS | Tier | Surcharge |
|---|---|---|---|
| Single, $100,000 | $100,000 | Base | $0 |
| Single, $110,000 | $110,000 | Tier 1 (1%) | $1,100 |
| Single, $130,000 | $130,000 | Tier 2 (1.25%) | $1,625 |
| Single, $200,000 | $200,000 | Tier 3 (1.5%) | $3,000 |
| Single, $90,000 + $20,000 fringe benefits + $17,000 salary sacrifice | $127,000 | Tier 2 (1.25%) | $1,375 |
| Couple, $150,000 + $90,000 | $240,000 | Tier 1 (1%) | $2,400 ($1,500 + $900) |
| Couple, $200,000 + $150,000 | $350,000 | Tier 3 (1.5%) | $5,250 |
| Single, $110,000, uninsured for 200 days | $110,000 | Tier 1 (1%) | $602.74 |
Is hospital cover cheaper than the surcharge?
To avoid the surcharge you need an appropriate level of private patient hospital cover: an excess of no more than $750 for singles or $1,500 for couples and families. Extras-only cover doesn’t count. Enter the yearly premium of a policy you are considering and the calculator shows whether the policy costs more or less than the surcharge. Remember that cover also brings benefits (and that the private health insurance rebate may reduce the premium), while the surcharge buys you nothing.
Important caveats
- The surcharge is separate from, and paid in addition to, the 2% Medicare levy.
- Dependent children count for MLS purposes if they are under 21, or 21 to 24 and studying full time. Foster children are not included.
- If you separate, marry or have a child during the year, single and family thresholds can apply to different parts of the year. This calculator uses one status for the whole year.
FAQs
What is the Medicare levy surcharge threshold for 2026–27?
$105,000 for singles and $210,000 for couples and families, plus $1,500 for each dependent child after the first. Above those amounts the surcharge is 1%, 1.25% or 1.5% depending on your tier.
Do I pay the surcharge if my partner has hospital cover but I don’t?
Yes, if your family income is above the threshold. Everyone in the family, including dependent children, needs appropriate hospital cover for you to avoid it.
Is salary sacrifice counted?
Yes. Salary-sacrificed super is a reportable super contribution, so it is added back when working out your tier, even though it lowers your taxable income.
Related calculators
- Pay Calculator 2026–27Take-home pay after tax and Medicare
- Salary Sacrifice Super CalculatorTax saved by salary sacrificing
- HECS-HELP Repayment CalculatorYour 2026–27 compulsory repayment
Sources
- ATO: Medicare levy surcharge income, thresholds and rates · updated 22 June 2026
- ATO: Paying the Medicare levy surcharge
- ATO: Appropriate level of private patient hospital cover
- ATO: Family and dependants for MLS purposes
- ATO: M2 Medicare levy surcharge 2026 (tax return instructions)
Figures current as of 13 October 2026
Each formula is checked against a separate test sheet with at least three worked examples. Results are estimates based on the numbers you enter and the published rules; your actual figures may differ. This is general information, not financial or tax advice.
Spotted a mistake? Contact us and we will fix it and update the date above.