Medicare Levy Surcharge Calculator 2026–27
Would you pay the Medicare levy surcharge in 2026–27? Your tier and rate (1%–1.5%), the surcharge versus basic hospital cover, break-even income, the private health insurance rebate and Lifetime Health Cover loading.
| MLS tier | — |
|---|---|
| Surcharge rate | — |
| Surcharge for the days uncovered | — |
| Cost of basic hospital cover | — |
| Cheaper option | — |
| Income at which cover becomes cheaper than the surcharge | — |
| Private health insurance rebate | — |
| Lifetime Health Cover loading | — |
| Distance to the next tier | — |
In short
The Medicare levy surcharge is 1%, 1.25% or 1.5% of income for singles earning over $105,000 / $123,000 / $164,000 (families $210,000 / $246,000 / $328,000, plus $1,500 per child after the first) in 2026–27 who do not hold private hospital cover. At $125,000 it is $1,563 — more than a basic hospital policy — which is why cover becomes worthwhile around $115,000–140,000; Lifetime Health Cover adds 2% a year to premiums for each year over 30 before you first take cover.
Who this is for: Higher-earning Australians deciding whether to buy hospital cover.
MLS tiers 2026–27
| Tier | Single income | Family income | Surcharge | Rebate (under 65) |
|---|---|---|---|---|
| Base | $105,000 or less | $210,000 or less | 0% | 24.3% |
| 1 | $105,001 – $123,000 | $210,001 – $246,000 | 1% | 16.2% |
| 2 | $123,001 – $164,000 | $246,001 – $328,000 | 1.25% | 8.1% |
| 3 | $164,001 or more | $328,001 or more | 1.5% | 0% |
- Family thresholds rise by $1,500 for each dependent child after the first.
- At $125,000 the surcharge is $1,563 — about the price of a basic hospital policy, which is exactly how the policy is designed.
- Basic "junk" hospital policies that only satisfy the MLS cost $1,100–1,600 a year for singles after the rebate; buy one if you are above the threshold and would otherwise pay more in surcharge.
- Cover must be held for the whole year to avoid the surcharge entirely; part-year cover prorates it.
See also: Australian Income Tax Calculator 2026–27, Pay Calculator Australia 2026–27.
Assumptions
- Tier from single income or combined family income (+$1,500 per child after the first); MLS = own income × rate × uncovered days ÷ 365, each spouse separately.
- Break-even = premium ÷ 1% (not below the threshold).
- Rebate percentages are 2025–26 values; LHC loading = 2% × (age − 30).
Worked example
$125,000 is in Tier 2 ($123,001–$164,000): surcharge 1.25% = $1,563 a year. A $1,400 basic hospital policy is cheaper by $163 — and provides some cover. The break-even is about $140,000 for a $1,400 premium at the 1% rate (lower in Tier 2). At 34 a new policy carries an 8% Lifetime Health Cover loading for 10 years; the rebate at Tier 2 is 8.1%. $39,000 more income would reach Tier 3 (1.5%).
Frequently asked questions
What is the Medicare levy surcharge threshold for 2026–27?
$105,000 for singles and $210,000 for families (plus $1,500 per child after the first). Above it you pay 1%, 1.25% or 1.5% of income unless you hold hospital cover.
Is it cheaper to pay the surcharge or buy hospital cover?
Usually cover, once income passes about $115,000–140,000: 1% of income exceeds a basic policy's $1,100–1,600 price, and above $123,000 the rate is 1.25%.
Does extras cover avoid the surcharge?
No — only hospital cover with an excess of $750 or less (singles) / $1,500 (families) counts.
What is Lifetime Health Cover loading?
A 2% premium loading for every year you are over 30 when you first take hospital cover, up to 70%, lasting 10 years. Join before 1 July after your 31st birthday to avoid it.
Does my partner's income count?
Yes — once combined income exceeds the family threshold, each of you pays MLS on your own income unless you both have hospital cover.
Does overseas travel reduce the surcharge?
No — only days covered by an appropriate hospital policy reduce it; periods abroad still count unless you hold cover.
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