Medicare Levy Surcharge Calculator
Work out whether you or your staff are liable for the MLS surcharge.
Your situation
Income = taxable income + reportable fringe benefits + net investment losses + reportable super contributions.
Appropriate hospital cover exempts you from MLS.
Surcharge applies
Tier 2 applies (1.3%) because income exceeds the threshold.
- Threshold
- $101,000
- MLS rate
- 1.3%
- Annual surcharge
- $1,500
- Break-even premium
- $1,500
The Medicare levy surcharge is an extra 1.0%, 1.25% or 1.5% on high-income earners who do not hold appropriate private hospital insurance. For a specialist earning $250,000, the surcharge can exceed $3,700 a year — often more than the cost of a basic hospital policy.
The thresholds move every year
Single and family thresholds are indexed annually. What kept you exempt last year may not this year if your income has grown. The calculator uses the indexed thresholds for the selected financial year.
Family thresholds increase by $1,500 for each dependent child after the first. A family with three children has a higher threshold than a couple with one.
What counts as income for MLS purposes
The ATO uses a specific definition: taxable income plus reportable fringe benefits, total net investment losses, and reportable super contributions. It is not the same as your gross billings or your taxable income alone.
If you salary sacrifice superannuation or receive a car fringe benefit, those amounts are added back. The calculator asks for the combined total.
Hospital cover, not extras
Only hospital cover exempts you from the surcharge. Extras cover — dental, optical, physio — does not count, no matter how comprehensive the policy.
The policy must be held by you, or you must be named on a family policy. Being a dependent on a parent's policy only works until you turn 21, or 25 if you are a full-time student.
Frequently asked questions
Does extras cover exempt me from the surcharge?
No. Only hospital cover exempts you. Extras cover — dental, optical, physiotherapy — does not count, no matter how comprehensive the policy. The policy must be held by you, or you must be named on a family hospital policy.
What income does the ATO use for the surcharge?
It is taxable income plus reportable fringe benefits, total net investment losses, and reportable super contributions. That is broader than taxable income alone, so salary-sacrificed super and car fringe benefits are added back.
How much does the family threshold increase per child?
The family threshold rises by $1,500 for each dependent child after the first. A couple with two children has a higher threshold than a couple with one, and the calculator applies the increment automatically.
Related calculators
This calculator provides general information only and is not tax advice. It does not account for your individual circumstances. Confirm figures against the relevant legislation or with a registered tax agent before relying on them for a lodgement.
Reviewed by eHealth Systems Pty Ltd