The Medicare Levy, Medicare Levy Surcharge & Private Health Care Rebate 2026 & 2027
The Medicare Levy, Medicare Levy Surcharge (MLS), and Private Health Care Rebate are all administered through the taxation system and are affected by your level of taxable income.
Medicare Levy:
The Medicare Levy is a levy payable by all taxpayers, except those in low-income brackets. It remains at 2% of your personal taxable income in the 2025–2026 financial year. The ATO calculates the exact amount when you lodge your tax return, and it will be shown on your Notice of Assessment for each financial year.
The Medicare levy low-income thresholds for the 2025–2026 financial year are:
- Individual: If your taxable income is $26,000 or less, you are not required to pay the Medicare Levy. (A reduced rate applies between $26,000 and $32,500).
- Family: The family threshold is $43,846. This threshold increases by $4,027 for each dependent child or student.
- Seniors and Pensioners: The threshold for seniors and pensioners entitled to the Seniors and Pensioners Tax Offset (SAPTO) is $41,089 (with full levy applying above $51,361).
If you are an employee, the Medicare Levy continues to be calculated as part of the tax deducted by your employer.
Medicare Levy Surcharge:
The MLS is an additional charge on top of the standard Medicare Levy. Whether the Medicare Levy Surcharge applies to you depends on your taxable income and whether you have adequate private hospital insurance.
The MLS thresholds for the 2025–2026 financial year are:
- Singles: $101,000
- Families: $202,000
- The family income threshold increases by $1,500 for each dependent child after the first child.
If your taxable income is above these thresholds and you don't have private hospital cover, you may be required to pay the Medicare Levy Surcharge. The rate of the surcharge varies from 1% to 1.5% of your taxable income, depending on your income tier.
To avoid this surcharge, you, your spouse, and all your dependents must have hospital cover with a registered private health insurer. The extras cover alone is not sufficient.
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
| Single | $101,000 or less | $101,001 – $118,000 | $118,001 – $158,000 | $158,001 or more |
| Family | $202,000 or less | $202,001 – $236,000 | $236,001 – $316,000 | $316,000 or more |
| Medicare levy surcharge | 0% | 1% | 1.25% | 1.5% |
2026-2027
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
| Single | $105,000 or less | $105,001 – $123,000 | $123,001 – $164,000 | $164,001 or more |
| Family | $210,000 or less | $210,001 – $246,000 | $246,001 – $328,000 | $328,000 or more |
| Medicare levy surcharge | 0% | 1% | 1.25% | 1.5% |
Disclaimer
This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in these articles is for guidance only and should not be relied upon without obtaining professional advice having regard to your direct circumstances.
