Australia · 2026-27
The Medicare levy surcharge, 2026-27
A single person without appropriate private patient hospital cover pays the Medicare levy surcharge once income for surcharge purposes passes $105,000 in 2026-27: 1%, 1.25% or 1.5% of the whole income, depending on the tier. The surcharge is on top of the 2% Medicare levy.
Surcharge income thresholds and rates 2026-27
| Tier | Single | Family | Surcharge |
|---|---|---|---|
| Base tier | $105,000 or less | $210,000 or less | 0% |
| Tier 1 | $105,001 to $123,000 | $210,001 to $246,000 | 1% |
| Tier 2 | $123,001 to $164,000 | $246,001 to $328,000 | 1.25% |
| Tier 3 | $164,001 or more | $328,001 or more | 1.5% |
What it costs a single person, tier by tier
| Salary | Surcharge a year | Take-home with cover | Take-home without |
|---|---|---|---|
| $105,000 | None | $80,880 | $80,880 |
| $105,001 | $1,050.01 | $80,881 | $79,831 |
| $115,000 | $1,150.00 | $87,680 | $86,530 |
| $123,000 | $1,230.00 | $93,120 | $91,890 |
| $123,001 | $1,537.51 | $93,121 | $91,583 |
| $140,000 | $1,750.00 | $104,330 | $102,580 |
| $164,000 | $2,050.00 | $118,970 | $116,920 |
| $164,001 | $2,460.02 | $118,971 | $116,511 |
| $200,000 | $3,000.00 | $140,130 | $137,130 |
Compare $105,000 with $105,001: one extra dollar of income takes the surcharge from nothing to $1,050.01, because the percentage applies to the whole income. The same step happens at each tier line. Take-home is for a resident with no study loan and no salary sacrifice. The Medicare levy guide covers the 2% that applies to everyone.
Questions
What are the Medicare levy surcharge thresholds for 2026-27?
For singles: $105,000 or less is the base tier with no surcharge; $105,001 to $123,000 pays 1%; $123,001 to $164,000 pays 1.25%; $164,001 or more pays 1.5%. Families have thresholds of $210,000, $246,000 and $328,000, raised by $1,500 for each dependent child after the first.
Is it charged on the income over the threshold?
No, on the whole income for surcharge purposes. The ATO's example is a single person with $117,000 of income for surcharge purposes (taxable income plus reportable fringe benefits), who pays 1% of all of it: $1,170.00. So one dollar over $105,000 costs $1,050.01 at once.
What counts as income for surcharge purposes?
Taxable income, reportable fringe benefits, total net investment losses and reportable super contributions (which include salary sacrificed super), plus a spouse's if you have one. So salary sacrificing into super does not lower the income the surcharge is tested on.
How does it compare with the cost of cover?
The surcharge is the amount you pay for not holding hospital cover, so the comparison is with the premium for a policy that qualifies. On $140,000 the surcharge is $1,750.00 a year. This site does not know premiums, so it does not say which is cheaper.
More Australian guides
Estimates for the 2026-27 financial year using rates read from the ATO on 2026-10-03. Assumes an Australian resident for the whole year. Not payroll, tax or financial advice.