| Medicare levy | Medicare levy surcharge | |
|---|---|---|
| Rate | 2% | 1%, 1.25% or 1.5% |
| Who pays | Most taxpayers | Higher earners without hospital cover |
| Hospital cover avoids it? | No | Yes |
| Low-income reduction | Yes | Doesn't apply below threshold |
The Medicare levy
A 2% charge on taxable income that helps fund Medicare. Almost every resident taxpayer pays it, whether or not they have private health insurance. People on low incomes pay less or nothing, and some groups are exempt.
The Medicare levy surcharge
An extra charge on top of the levy, only for people whose income for MLS purposes is over the threshold and who don't have suitable private hospital cover. It's designed to nudge higher earners into private cover.
Can you pay both?
Yes. A single person earning $130,000 in 2026–27 with no hospital cover pays the 2% levy plus a 1.25% surcharge: 3.25% of taxable income in total.
Check your own numbers. Use the MLS calculator to see what you'd pay and the monthly break-even for hospital cover.