Find out how much Medicare levy and surcharge you pay, and whether private health insurance is worth it
All Australian residents pay a Medicare levy of 2% of their taxable income. If your income exceeds certain thresholds and you don't have private hospital cover, you also pay the Medicare Levy Surcharge (MLS) of 1% to 1.5%. This calculator helps you estimate your total Medicare obligations and decide whether private health insurance is financially worthwhile.
Last updated: March 2026
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The Medicare Levy Surcharge (MLS) is an additional tax of 1% to 1.5% on top of the standard 2% Medicare levy. It applies to individuals and families without private hospital cover whose income exceeds $93,000 (singles) or $186,000 (families) in FY2025-26.
The simplest way to avoid the MLS is to hold an approved private hospital cover policy for the full financial year. The policy must cover hospital treatment — extras-only policies do not exempt you from the surcharge.
Whether you pay the Medicare levy depends on your Medicare eligibility. Most temporary visa holders are not eligible for Medicare and may be exempt from the Medicare levy. Check with the ATO for your specific visa category.
At Tier 1 (income $93,000-$108,000) the MLS is 1% of income — approximately $930-$1,080 per year. At Tier 3 (income above $144,000) it is 1.5% — at least $2,160 per year. Compare this against the cost of a basic hospital cover policy, typically $1,200-$2,400 per year.