Australia Medicare Levy Calculator 2024-25
Calculate your Medicare levy and Medicare Levy Surcharge (MLS) for 2024/25 — includes private hospital cover impact and family thresholds.
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How to use this calculator
- 1
Enter your annual taxable income.
- 2
Select your family status — families have a higher Medicare levy threshold than singles.
- 3
If you have dependent children, enter the number — each adds $4,027 to the family threshold.
- 4
Indicate whether you have private hospital cover — without it, higher earners pay the Medicare Levy Surcharge (MLS) on top.
- 5
Results show your Medicare levy, any MLS payable, and the monthly cost.
Frequently asked questions
What is the difference between the Medicare levy and the Medicare Levy Surcharge?
The Medicare levy (2% of taxable income) is paid by most Australian residents to fund the public Medicare system. Almost everyone pays it. The Medicare Levy Surcharge (MLS) is an additional charge of 1%–1.5% imposed only on higher earners who do not have private hospital cover. The MLS thresholds in 2024/25 are $93,000 for singles and $186,000 for families. The purpose is to encourage higher earners to take out private health insurance and reduce pressure on the public system.
Who is exempt from the Medicare levy?
You may be exempt from the Medicare levy if you are a foreign resident, if you are a temporary visa holder without Medicare eligibility, if you earn below the low-income threshold ($26,000 for singles in 2024/25), or if you have a Medicare levy exemption certificate. Some recipients of certain government benefits may also qualify for an exemption or reduction. You claim your exemption or reduction when you lodge your tax return.
Is it worth getting private health insurance to avoid the MLS?
For incomes above $93,000 (single) or $186,000 (family), the 1% MLS equals $930+ per year for a single earner at the lowest threshold. Basic hospital cover can often be obtained for a similar or lower annual cost, making it financially worthwhile. At higher income levels ($108,001+), the 1.25% MLS is $1,350+, and at $144,001+ the 1.5% MLS is $2,160+. Compare the MLS amount against the premium for a compliant hospital policy (with a maximum $750 excess for singles) to determine your best option.
How does the Medicare levy reduction work for low-income earners?
If your income is below $26,000 (2024/25), you pay no Medicare levy. Between $26,000 and approximately $32,500, the levy is phased in at 10 cents per dollar above the threshold rather than the full 2%. This phase-in ensures the Medicare levy does not create a sudden large tax increase as income crosses the threshold. Similar phase-in provisions exist for families based on the family income threshold.
Medicare Levy Calculator Australia 2024-25 — Levy & Surcharge
Understanding the Medicare levy in Australia
The Medicare levy is a 2% charge on the taxable income of most Australian residents, collected to help fund the public Medicare healthcare system. It is separate from income tax but collected alongside it through the PAYG withholding system. Most Australians pay the full 2%, but low-income earners benefit from an exemption or reduced rate. For the 2024/25 income year, the exemption threshold for singles is $26,000 — below this amount, no levy is payable. Between $26,000 and approximately $32,500, the levy phases in gradually at 10 cents per dollar. Families have a higher combined threshold, currently $43,846 plus $4,027 for each dependent child, acknowledging the higher costs associated with raising a family.
The Medicare Levy Surcharge: a tax on not having private cover
The Medicare Levy Surcharge (MLS) is an additional tax of 1% to 1.5% levied on higher-income Australians who do not hold an appropriate level of private hospital cover. The 2024/25 income thresholds are $93,000 for singles and $186,000 for families. The surcharge rises to 1.25% above $108,001 and 1.5% above $144,001. For a single person earning $120,000 without private cover, the MLS adds $1,500 to their tax bill. Taking out a compliant private hospital cover policy (one with an annual excess no higher than $750 for singles) exempts you from the MLS entirely. Many people find this financially advantageous and it also gives access to faster elective surgery and a choice of specialist.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →