Australia · 2026-27
The Medicare levy, 2026-27
The Medicare levy is 2% of taxable income, charged on top of income tax. A single person with taxable income at or below $28,011 pays none, and between $28,011 and $35,013 the levy is phased in at 10c for each dollar over the lower threshold.
The levy at 10 taxable incomes
| Taxable income | Levy payable | Share of income | Full 2% would be |
|---|---|---|---|
| $20,000 | $0.00 | 0% | $40,000 |
| $28,011 | $0.00 | 0% | $56,022 |
| $29,000 | $98.90 | 0.3% | $58,000 |
| $30,000 | $198.90 | 0.7% | $60,000 |
| $32,000 | $398.90 | 1.2% | $64,000 |
| $35,013 | $700.20 | 2% | $70,026 |
| $40,000 | $800.00 | 2% | $80,000 |
| $60,000 | $1,200.00 | 2% | $120,000 |
| $90,000 | $1,800.00 | 2% | $180,000 |
| $150,000 | $3,000.00 | 2% | $300,000 |
The shade-in means the levy rises by 10c for each extra dollar between $28,011 and $35,013, five times the 2% rate, which is why a small raise there is taxed more heavily than the 15% band alone suggests. Above $35,013 the full 2% applies. For high earners without private cover see the Medicare levy surcharge.
Questions
What is the Medicare levy rate?
2% of taxable income. The ATO's income tax rates table states that its rates do not include the Medicare levy of 2%.
Who pays a reduced levy?
A single person whose taxable income is between $28,011 and $35,013 (and who is not entitled to the seniors and pensioners tax offset) pays a reduced levy; at or below $28,011 none is due. People entitled to the seniors and pensioners tax offset have higher thresholds ($44,268 and $55,335) that this site does not model.
How is the reduced levy worked out?
10c for each dollar over the lower threshold. On $29,000 that is 10% of $989, which is $98.90: the same figure the ATO's own example gives.
Are these the 2026-27 thresholds?
They are the thresholds the ATO's Medicare levy reduction page prints; that page speaks of 2025-26 and had not been updated for 2026-27 when this was read on 2026-10-03. The levy rate is unchanged. Only incomes between roughly $28,000 and $35,000 are affected if the threshold moves, and the page will be updated once the ATO publishes it.
Does a couple or family have different thresholds?
Yes: families can qualify for a reduction based on family taxable income. That is not modelled here, so a family on a low income may owe less levy than shown.
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.