Tax · 2026-27
Medicare levy surcharge calculator
On $120,000 with no private hospital cover, the Medicare levy surcharge is 1%: $1,200 a year. A $1,300 hospital policy would cost $100 more than the surcharge.
Surcharge without hospital cover
$1,200
a year, at 1%
The surcharge is cheaper than this policy
| Income for surcharge purposes | $120,000 |
|---|---|
| Surcharge charged on | $120,000 |
| Surcharge | $1,200 |
| Distance to the next tier | - |
Surcharge tiers for 2026-27
| Rate | Singles | Families |
|---|---|---|
| 0% | $0 to $105,000 | $0 to $210,000 |
| 1% | $105,001 to $123,000 | $210,001 to $246,000 |
| 1.25% | $123,001 to $164,000 | $246,001 to $328,000 |
| 1.50% | $164,001 and over | $328,001 and over |
Family thresholds rise by $1,500 for each dependent child after the first. Source: privatehealth.gov.au.
The trap: it applies to all of your income
The surcharge is not charged only on the income above the threshold. Earn one dollar over $105,000 as a single without cover and the 1% applies to the whole amount: about $1,050. That is why a pay rise or a salary sacrifice that tips you over the line can cost more than expected, and why the salary sacrifice calculator includes it.
Common questions
What is the Medicare levy surcharge?
An extra 1% to 1.5% of your income, on top of the 2% Medicare levy, if you earn over $105,000 as a single ($210,000 as a family) and do not hold an appropriate level of private hospital cover.
Is it cheaper to get private health insurance than pay the surcharge?
Often, yes, once you are past the threshold. At $120,000 the surcharge is $1,200 a year. Basic hospital cover with an excess at or below $750 for singles avoids it, and can cost less than that.
Which income counts for the surcharge?
Income for surcharge purposes is your taxable income plus reportable fringe benefits, net investment losses (such as negative gearing) and reportable super contributions like salary sacrifice. That total decides your tier. The surcharge itself is then charged on taxable income plus fringe benefits only.
Does extras-only cover avoid the surcharge?
No. Only hospital cover from a registered insurer counts, and the excess must be no more than the limit.
More ways to check your pay
How this is worked out
- Your tier is set by income for surcharge purposes: taxable income, reportable fringe benefits, net investment losses and reportable super contributions (plus your partner's for families).
- The surcharge is then charged on taxable income plus reportable fringe benefits only.
- Assumes no hospital cover all year. With cover for part of the year, the surcharge applies only to the days without it.
- The comparison ignores what the hospital cover gives you, which is the bigger question. It only answers which costs less.
Estimate only, not tax or insurance advice. See our methodology.