How the MLS Optimizer Works
The Medicare Levy Surcharge is an additional tax of 1% to 1.5% of your taxable income, charged to higher earners who don't hold qualifying private hospital cover. For many Australians, buying a basic hospital policy is significantly cheaper than paying the MLS — but the maths depends on your specific situation.
This optimizer evaluates five strategies and ranks them by your actual net annual cost. It factors in your MLS tier, the government's Private Health Insurance Rebate (which varies by income and age), and indicative cover costs. You can also enter your own cover cost quotes for a more accurate comparison.
The "reduce MLS income" strategy shows how much you'd need to reduce your income by to drop below your current MLS threshold. Note that salary sacrifice does not reduce MLS income — the sacrificed amount is added back as reportable super contributions. Legitimate income reduction strategies exist but require professional tax advice.
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Sources: ATO — Medicare Levy Surcharge | privatehealth.gov.au | Last updated April 2025 · Methodology
General information only. This calculator provides estimates for educational purposes and should not be relied upon as financial, tax, or insurance advice. Cover costs are indicative — compare actual policies on privatehealth.gov.au. Consult a registered tax agent or financial adviser for advice specific to your circumstances.