How the levy is calculated
Most taxpayers pay 2% of their taxable income. It is withheld from your pay with income tax and settled when you lodge your return.
Below the low-income threshold ($28,011 for singles), you pay nothing. Just above it, the levy phases in at 10 cents for every dollar over the threshold, until it reaches the full 2%.
Medicare levy by income
| Taxable income | Medicare levy | Share of income |
|---|---|---|
| $25,000 | $0 | 0.00% |
| $27,222 | $0 | 0.00% |
| $30,000 | $199 | 0.66% |
| $32,000 | $399 | 1.25% |
| $34,000 | $599 | 1.76% |
| $40,000 | $800 | 2.00% |
| $60,000 | $1,200 | 2.00% |
| $100,000 | $2,000 | 2.00% |
| $150,000 | $3,000 | 2.00% |
The Medicare levy surcharge (MLS)
Higher earners who do not hold appropriate private hospital cover pay an extra 1% to 1.5% surcharge on top of the levy. It is designed to encourage private insurance. Families have higher thresholds than singles.
Who can be exempt
- Foreign residents and some temporary visa holders not entitled to Medicare.
- Certain members of the defence force and people entitled to full free medical treatment.
- Families and seniors with incomes under their higher thresholds pay a reduced levy.
Example: just above the threshold
On $31,011, the full 2% levy would be $620. Instead you pay 10% of the $3,000 above the threshold: $300. The reduced levy stops once 10% of the excess reaches 2% of income.
Families and seniors
Families have a higher low-income threshold that increases for each dependent child, and seniors and pensioners eligible for the SAPTO have their own higher threshold. These thresholds are updated in each federal budget.
Frequently asked questions
What is the Medicare levy rate?
2% of taxable income.
Who does not pay the Medicare levy?
Singles with taxable income below $28,011, and some foreign residents and exempt groups.
Is the Medicare levy surcharge the same as the levy?
No. The surcharge is an extra 1% to 1.5% for higher earners without private hospital cover.
Is the Medicare levy included in my tax withheld?
Yes. Employers include it in PAYG withholding, and it is finalised on your tax return.
Figures use ATO 2026-27 resident tax rates, the low income tax offset, the Medicare levy and HELP repayment rates. Read our methodology. Last updated September 25, 2026. Estimates for information only, not tax advice.