Medicare Levy Surcharge Calculator
Find out if you need to pay the MLS and whether private hospital cover would save you money. Instant calculations for the 2025-26 financial year.
Understanding the surcharge
How the Medicare Levy Surcharge Works
The MLS is an additional tax of 1% to 1.5% on top of the standard 2% Medicare Levy. It applies to higher-income Australians who don't hold qualifying private hospital cover. The idea is simple: if you can afford to go private, the government would rather you did — and charges you extra if you don't.
2025-26 MLS Tiers
Thresholds were frozen from 2014-15 to 2024-25. For 2025-26, they increased for the first time in a decade.
| Tier | Rate | Single Threshold | Family Threshold |
|---|---|---|---|
| Tier 0 — No MLS | 0% | $0 – $101,000 | $0 – $202,000 |
| Tier 1 | 1% | $101,001 – $118,000 | $202,001 – $236,000 |
| Tier 2← $130,000 example | 1.25% | $118,001 – $158,000 | $236,001 – $316,000 |
| Tier 3 | 1.5% | $158,001+ | $316,001+ |
Source: ATO 2025-26 MLS rates. Family thresholds increase by $1,500 for each dependent child after the first.
Worked Example: $130,000 Single Income
Under 65, no private hospital cover, no fringe benefits or super contributions.
MLS Income
$130,000
Tier & Rate
1.25%
Tier 2
Annual MLS
$1,625
$135/month
Basic Cover (After Rebate)
$1,287
$107/month
Buying basic hospital cover saves $338/year. At $130,000, you'd pay $1,625 in MLS, but basic cover after the 8% PHI rebate costs only $1,287. You get hospital cover and save money.
MLS by Income Level
Single taxpayer, under 65, no private hospital cover. Shows where buying cover starts saving you money.
Based on ATO 2025-26 MLS rates. "Cover saves" means basic hospital cover after PHI rebate is cheaper than paying the surcharge. See your personalised comparison →
What Most People Don't Realise
Four facts that can cost you thousands if you don't know them.
Hidden income trap
$103,000 MLS income
Someone earning $95,000 taxable with $8,000 in reportable super has an MLS income of $103,000 — above the threshold, triggering $1,030/year in MLS. Reportable fringe benefits and net investment losses also count.
What counts as MLS income →Cover is cheaper
$338 saved
At $130,000, the MLS costs $1,625/year. Basic hospital cover after the PHI rebate is $1,287/year. You get hospital cover and pocket the difference.
Cheapest MLS-exempt cover →Family thresholds
+$1,500/child
The family threshold starts at $202,000 for couples with zero or one child. With 2 children it rises to $203,500, and with 3 it's $205,000. This can push families below the threshold entirely.
Family MLS rules →Common misconception
$0 MLS reduction
Salary sacrificing $15,000 into super reduces taxable income to $115,000, but the ATO adds it back as a reportable super contribution. MLS income stays at $130,000. Your MLS doesn't change by a single cent.
Salary sacrifice & MLS explained →MLS Is Not the Medicare Levy
The Medicare Levy is a flat 2% on taxable income that almost every taxpayer pays — it funds Medicare. The Medicare Levy Surcharge is a separate, additional charge of 1% to 1.5% that only applies to higher earners without private hospital cover. They're assessed independently: you can owe the 2% Levy, the Surcharge, both, or neither. Most people who owe the MLS don't realise it until they lodge their tax return.
The calculator above tells you whether you owe the surcharge and whether buying cover is the smarter move. Full comparison: Medicare Levy vs MLS →
Learn more
MLS Guides
In-depth guides to help you understand the Medicare Levy Surcharge and make informed decisions.
Medicare Levy Surcharge Thresholds 2025-26
Current MLS income thresholds and surcharge rates for singles and families, how they're calculated, and when the surcharge applies.
How to Avoid the Medicare Levy Surcharge
Practical strategies to avoid paying the MLS, including private health insurance options and income structuring.
Cheapest Hospital Cover to Avoid the MLS
How to find the cheapest private hospital cover that satisfies the MLS exemption and saves you money overall.
Lifetime Health Cover Loading: How Age Affects Your Premiums
How LHC loading works in Australia: 2% per year penalty for delaying hospital cover past 31, the 1,094 days of absence rule, 10-year removal, exemptions, and impact on the MLS break-even.
MLS Income Explained: What Counts Beyond Taxable Income
Income for MLS purposes includes more than taxable income. Learn how reportable fringe benefits, super contributions, and investment losses affect your MLS threshold — with worked examples for 2025-26.
Salary Sacrifice & MLS: Why It Doesn't Reduce Your Surcharge
Salary sacrifice into super does not reduce your Medicare Levy Surcharge. Learn why the ATO adds reportable super contributions back, with worked examples.
Medicare Levy vs Medicare Levy Surcharge: What's the Difference?
The Medicare Levy (2%) and Medicare Levy Surcharge (1%–1.5%) are separate charges with different rates, income tests, and exemptions. Learn who pays each, how they interact, and whether you owe one or both.
PHI Rebate Tiers 2025-26: How Your Income Affects Your Rebate
Full 3×4 rebate table by age and income tier for 2025-26. How to claim the rebate as a premium reduction or tax offset, worked examples, and how it interacts with the MLS.