Australia MLS Calculator 2026
The Medicare Levy Surcharge (MLS) is an extra 1.0% to 1.5% tax on Australians earning above income thresholds without private hospital cover. This calculator estimates 2026 MLS plus the standard 2% Medicare Levy using ATO Tier 1-3 thresholds.
| MLS tier | — |
| MLS rate | — |
| Threshold (single equivalent) | — |
| Medicare Levy (2% of income) | — |
| MLS amount | — |
| Total annual cost | — |
The Medicare Levy Surcharge (MLS) is an additional 1.0% to 1.5% tax imposed by the Australian Taxation Office on individuals and families earning above set thresholds who do not hold appropriate private hospital cover. It sits on top of the standard 2% Medicare Levy and is designed to encourage private health insurance uptake.
2026 MLS Income Thresholds
For singles in 2026: Tier 1 starts at AUD $97,000 (1.0% MLS), Tier 2 at $113,000 (1.25%), Tier 3 at $151,000 (1.5%). For families and couples, the base threshold is $194,000 (Tier 1), rising by $1,500 for each dependent child after the first. Below the base threshold no MLS applies. Above Tier 3 the full 1.5% surcharge applies on the entire MLS income — not just the excess above the threshold.
How to Avoid the MLS
Hold an appropriate private hospital policy with an Australian-registered insurer for the full income year. Extras-only policies (dental, optical) do not exempt you. The policy must have an excess of $750 or less for singles, $1,500 or less for couples/families. The premium is often cheaper than the MLS itself — a $120K single typically pays ~$1,200 MLS versus ~$1,000-$1,500 for basic hospital cover, plus they get the Australian Government Rebate of 8-32% off premiums depending on age and income.
Income for MLS Purposes
The ATO uses income for MLS purposes, which includes taxable income, reportable fringe benefits, total net investment loss, reportable super contributions, and exempt foreign employment income. For singles you use your own MLS income; for couples and families you combine both partners' MLS incomes. The threshold rises by $1,500 for each dependent child after the first, so a family with 3 kids has thresholds of $197,000 / $230,000 / $307,000.
Common MLS Mistakes
(1) Cancelling hospital cover mid-year — you owe pro-rata MLS for the uncovered days. (2) Extras-only cover — does not exempt you; you need hospital cover specifically. (3) Reportable super contributions — salary-sacrificing super reduces taxable income but is added back for MLS purposes. (4) Forgetting partner income — if you're partnered, MLS uses combined household income even if you file separately.
Last updated May 2026. Source: Australian Taxation Office (ato.gov.au).