🏥 Medicare Levy Calculator
Australian Medicare Levy & Surcharge Calculator 2025-26
📊 Understanding the Medicare Levy
The Medicare levy calculator helps Australian taxpayers determine their exact Medicare obligations for the 2025-26 financial year. The standard Medicare levy is 2% of your taxable income, funding Australia's public healthcare system. However, low-income earners may qualify for a reduced rate or full exemption, while high-income earners without private hospital cover face an additional Medicare Levy Surcharge (MLS) of 1-1.5%. Whether you're employed, self-employed, or a pensioner, this calculator factors in your family status, dependents, and private health insurance to show you exactly what you'll owe—helping you plan your finances and avoid unexpected tax bills.
📝 How to Use the Medicare Levy Calculator
- Enter Your Taxable Income: Input your total taxable income for the financial year. This is your gross income minus allowable deductions (found on your tax return or pay summary).
- Select Family Status: Choose Single, Family (married/de facto), Single Senior/Pensioner, or Family Senior/Pensioner. Seniors and families have higher exemption thresholds.
- Enter Number of Dependents: Add any dependent children under 21 or full-time students. Each dependent increases your family threshold by $4,027.
- Indicate Private Hospital Cover: Select whether you have appropriate private hospital insurance. This determines if you're liable for the Medicare Levy Surcharge.
- Click Calculate: View your complete Medicare levy breakdown including base levy, any reductions, MLS surcharge if applicable, and weekly impact on your pay.
📐 Medicare Levy Formula & Calculation Method
Standard Medicare Levy (2%)
The standard Medicare levy applies to all Australian taxpayers at a flat 2% rate on taxable income. This funds Medicare, Australia's universal healthcare system.
Shade-In Reduction (Low Income)
If your income falls between the exemption threshold and shade-out threshold, you pay a reduced levy calculated at 10% of the amount over the threshold—much less than the full 2%.
Family Threshold Adjustment
Families with dependent children receive higher thresholds. Each child adds $4,027 to both the exemption and shade-out thresholds, potentially reducing or eliminating your levy.
Medicare Levy Surcharge (MLS)
High-income earners without private hospital cover pay an additional surcharge. The rate increases with income: 1% for Tier 1, 1.25% for Tier 2, and 1.5% for Tier 3.
📊 Medicare Levy Examples
Example 1: Average Income Earner
Scenario: Sarah is a single office worker earning $75,000 taxable income with no private hospital cover.
Inputs: Income: $75,000 | Status: Single | Private Cover: No
Calculation:
- Income $75,000 > Shade-out threshold $32,500 → Full levy applies
- Medicare Levy: $75,000 × 2% = $1,500
- MLS: Income $75,000 < $93,000 threshold → $0
Result: Total Medicare: $1,500/year ($28.85/week) | Status: Full 2% Levy
Example 2: High Income Without Private Cover
Scenario: Marcus is a single contractor earning $120,000 taxable income with no private hospital cover.
Inputs: Income: $120,000 | Status: Single | Private Cover: No
Calculation:
- Medicare Levy: $120,000 × 2% = $2,400
- MLS: Income $120,000 falls in Tier 2 ($108,001-$144,000) → 1.25% rate
- MLS Amount: $120,000 × 1.25% = $1,500
Result: Total Medicare: $3,900/year ($75/week) | Status: MLS Surcharge Applies
💡 Basic hospital cover (~$800/year) would save Marcus ~$700 vs paying the surcharge!
Example 3: Low Income Reduction
Scenario: Alex is a single part-time worker earning $28,000 taxable income.
Inputs: Income: $28,000 | Status: Single | Private Cover: N/A
Calculation:
- Income $28,000 > Exempt threshold $26,000 but < Shade-out $32,500
- Shade-in applies: ($28,000 - $26,000) × 10% = $200
- Full 2% would have been: $28,000 × 2% = $560
- Reduction: $560 - $200 = $360 saved
Result: Total Medicare: $200/year ($3.85/week) | Status: Reduced Levy
📊 2025-26 Income Thresholds
| Category | Exempt Below | Full Levy Above |
|---|---|---|
| Single | $26,000 | $32,500 |
| Family | $43,846 | $54,808 |
| Single Senior/Pensioner | $41,089 | $51,361 |
| Family Senior/Pensioner | $57,198 | $71,498 |
| Per Dependent Child | +$4,027 to threshold | |
📊 Medicare Levy Surcharge (MLS) Rates
| Income (Single) | Income (Family) | MLS Rate |
|---|---|---|
| $0 - $93,000 | $0 - $186,000 | 0% |
| $93,001 - $108,000 | $186,001 - $216,000 | 1.0% |
| $108,001 - $144,000 | $216,001 - $288,000 | 1.25% |
| $144,001+ | $288,001+ | 1.5% |
💡 Important Tips for Medicare Levy
- Get Private Hospital Cover: If earning over $93,000 (single) or $186,000 (family), private cover often costs less than the MLS surcharge—compare before tax time.
- Salary Sacrifice: Contributions to super reduce your taxable income, potentially lowering both your Medicare levy and any MLS.
- Claim Deductions: Work-related expenses and deductions lower your taxable income, reducing your Medicare obligations.
- Family Threshold: Pool income with your spouse for family thresholds—often more favourable than separate single thresholds.
- Check Exemptions: Foreign residents, certain visa holders, and people in exempt categories may not need to pay the Medicare levy at all.
- Use myTax: The ATO's free myTax system automatically calculates your Medicare levy when you lodge your return.
🔗 Related Calculators
❓ Frequently Asked Questions
📚 Official ATO Resources
Created by Omnicalculator.space — Your trusted source for Australian tax calculators.
Last Updated: January 2026 | 2025-26 Financial Year Rates