Medicare Levy Surcharge Calculator 2024–25

What is the Medicare Levy Surcharge?

The Medicare Levy Surcharge (MLS) is an additional charge levied on Australian taxpayers who earn above a set income threshold and do not hold an appropriate level of private hospital cover. It sits on top of the standard 2% Medicare Levy and ranges from 1% to 1.5% of your income for surcharge purposes. The MLS exists to encourage higher-income earners to take out private hospital insurance and ease demand on the public health system. Because the surcharge is calculated on your whole income — not just the amount above the threshold — even a small pay rise can trigger a charge of several hundred or several thousand dollars, which is often more than the cost of a basic hospital policy.

2024–25 MLS Thresholds & Rates

The family income threshold increases by $1,500 for each dependent child after the first. Couples and families are assessed on their combined income for surcharge purposes.

How to Avoid the Medicare Levy Surcharge

Before 30 June, run the Medicare Levy Surcharge Calculator to check whether basic private hospital cover would cost you less than the surcharge itself.

The simplest way to avoid the MLS is to hold an appropriate private hospital insurance policy for the full income year. To count, the policy must be registered hospital cover (not extras-only) with an excess no higher than $750 for singles or $1,500 for couples and families. If you hold cover for only part of the year, the surcharge is pro-rated for the days you were uninsured. Before buying a policy purely to dodge the surcharge, compare the annual premium of a basic hospital policy against the surcharge this calculator shows — in many cases the policy is cheaper, and you gain hospital cover as well. You can also look at related decisions with our salary packaging calculator and check your overall obligations on the Medicare Levy calculator.

Medicare Levy vs Medicare Levy Surcharge

It is easy to confuse the two charges, but they are separate. The Medicare Levy is a flat 2% of taxable income paid by most taxpayers to help fund Medicare, with reductions and exemptions for low-income earners. The Medicare Levy Surcharge is an extra 1%–1.5% that applies only to higher-income earners without private hospital cover. Everyone liable for the surcharge also pays the levy, but most people who pay the levy never pay the surcharge. This calculator shows both so you can see your total Medicare obligation in one place. To estimate your full tax position, try our income tax calculator.