What it is
The Medicare levy helps fund Australia's public health system. It is 2% of your taxable income and is charged in addition to income tax. On a $60,000 salary it comes to $1,200 a year; on $100,000 it is $2,000.
Your employer includes it in the tax withheld from your pay, and the final amount is worked out in your tax return.
Low-income reduction
You do not pay the levy if your taxable income is at or below the lower threshold, and you pay a reduced amount if it is between the lower and upper thresholds. For a single person not entitled to the seniors and pensioners tax offset the thresholds used by this site for 2026–27 are $28,011 and $35,013.
Between the two, the levy is 10% of the amount over the lower threshold. Different thresholds apply to families and to seniors and pensioners.
Note: the 2026–27 thresholds had not been published when this page was last reviewed, so the previous year's figures are shown. They are normally updated in the Federal Budget.
Exemptions
You may qualify for a full or half exemption if you:
- meet certain medical requirements;
- are a foreign resident for tax purposes;
- are not entitled to Medicare benefits (you usually need a Medicare Entitlement Statement).
Medicare levy surcharge is different
The Medicare levy surcharge (MLS) is a separate charge of 1% to 1.5% for people above an income threshold who do not have an appropriate level of private patient hospital cover. It is on top of the Medicare levy. Our calculators do not include the surcharge.