What is the Medicare Levy Surcharge (MLS)?
If your income is over a certain threshold, you have to pay the Medicare Levy Surcharge, unless you have private hospital cover.
Australian taxpayers contribute to the cost of public health care through the Medicare Levy. This surcharge encourages those with higher incomes to take out private health insurance and use the private hospital system to reduce the demand on the public hospital system.
To be exempt from paying the Medicare Levy Surcharge, you must hold private hospital cover for the full financial year. If you only hold hospital insurance for part of the year, you may only have a partial exemption from the surcharge due. Without hospital cover, the amount you’ll pay depends on your annual income, as shown in the table below.
To avoid the MLS, we recommend taking out our Basic+ Hospital cover. This entry-level cover is our most affordable, ensuring access to private healthcare when you need it most and is ideal for those seeking hospital cover for tax purposes.
| Medicare Levy Surcharge | 0.00% | 1.00% | 1.25% | 1.50% |
|---|---|---|---|---|
| Singles | $101,000 or less | $101,001 - $118,000 | $118,001 - $158,000 | $158,001 or more |
| Families (single parents and couples) | $202,000 or less | $202,001 - $236,000 | $236,001 - $316,000 | $316,001 or more |
| Medicare Levy Surcharge | 0.00% | 1.00% | 1.25% | 1.50% |
|---|---|---|---|---|
| Singles | $97,000 or less | $97,001 - $113,000 | $113,001 - $151,000 | $151,001 or more |
| Families (single parents and couples) | $194,000 or less | $194,001 - $226,000 | $226,001 - $302,000 | $302,001 or more |
Follow the below steps to see how much you could save in the 2025-26 financial year if you take out hospital cover by 1 July 2025.
Multiply your yearly taxable income by the applicable MLS rate.
Compare our hospital cover options and get an instant quote here.
To see all available covers, select 'Show all cover options' at the bottom.
To compare the annual cost, select 'Per year' from the drop down menu below the price.
Calculate the difference between your Medicare Levy Surcharge and chosen hospital cover.
For example: If you're 30 years old and living in Queensland, on a single annual income of $120,000 with no dependants, you would pay a MLS of $1,500 (1.25%) come tax time.
However, with our Basic+ Hospital cover you would only pay $1,327.25 per year, saving you $172.75 a year plus the ability to benefit from private hospital care.
The income threshold levels for couples includes de facto couples. For families with children, the income threshold is increased by $1,500 for each additional dependant child after the first. You can find more information about the Medicare Levy Surcharge at PrivateHealth.gov.au.
*Your rates may differ based on your Lifetime Health Cover loading (LHC). Actual rates may differ from those stated by up to 5c due to rounding increments.
