Medicare Levy Surcharge Calculator

The thresholds and rates for 2026-27

For 2026-27 the surcharge starts at $105,000 for a single person and $210,000 for a family. It applies in three tiers: 1% from the entry threshold, 1.25% above $123,000 single or $246,000 family, and 1.5% above $164,000 single or $328,000 family. The family threshold rises by $1,500 for each dependent child after the first, so a family with three children is assessed against a higher figure than a couple with one.

The thresholds are indexed annually. What kept you exempt last year may not this year if your income has grown, and the calculator applies the indexed thresholds for whichever financial year you select.

Each rate applies to the whole of your income

The surcharge is not a marginal rate. Once you cross into a tier, that tier's percentage applies to the whole of your income for MLS purposes, not only to the amount above the line.

That makes the tier boundaries cliffs rather than slopes. A single person moving from $122,999 to $123,000 does not pay 1.25% on the last dollar; they pay 1.25% on everything, which is about $308 more surcharge for $1 of extra income.

What counts as income for MLS purposes

The ATO uses a specific definition: taxable income plus reportable fringe benefits, total net investment losses, and reportable super contributions. It is not the same as your gross billings or your taxable income alone.

If you salary sacrifice superannuation or receive a car fringe benefit, those amounts are added back. The calculator asks for the combined total.

Hospital cover, not extras

Only hospital cover exempts you from the surcharge. Extras cover (dental, optical, physio) does not count, no matter how broad the policy.

The policy must be held by you, or you must be named on a family policy. Being a dependent on a parent's policy only works until you turn 21, or 25 if you are a full-time student.

Part-year cover, and what this calculator models

The surcharge is worked out day by day, so it applies only to the days you did not hold hospital cover. Taking out a policy in October removes the surcharge for the rest of the financial year rather than for none of it, which is why the timing of cover matters as much as the decision to take it.

This calculator models the full year: it asks whether you held cover, not for how long. If you took cover partway through the year, treat the result as the full-year figure and scale it to the number of uncovered days.

It also assesses a family on the combined family income against the family threshold. The ATO additionally requires that person's own income to exceed the single threshold before they are liable, which this calculator does not ask for, so a family where one partner earns most of the income should check the position for each partner separately.