Medicare Levy Surcharge Thresholds Australia (2025-26 MLS tiers)

Check the Medicare Levy Surcharge (MLS) thresholds, rates and tier rules for Australia in 2025-26. Use this guide to see when the surcharge applies, how private hospital cover changes the outcome, and how MLS differs from the base Medicare levy.

Quick answers

MLS is separate from the Medicare levy and only applies when your income is above the MLS thresholds and you do not have eligible hospital cover.
For 2025-26 singles, the base tier is $101,000 or less, then MLS can apply from $101,001+ if you do not have eligible cover.
2025-26 family MLS thresholds start at $202,000, with the family threshold increasing for MLS dependent children after the first.
MLS rates are 1%, 1.25% and 1.5% depending on the income tier.

1) What income is used for MLS?

The ATO uses an income test for MLS purposes. It’s not always the same as taxable income.

Income for MLS purposes generally includes:

taxable income
reportable fringe benefits
net investment losses (including net rental losses)
reportable super contributions
exempt foreign employment income (if taxable income is $1 or more)

If you have a spouse, combined income can be used to determine which tier applies.

2) Thresholds and rates (2025–26)

If you don’t have eligible hospital cover, your MLS rate is determined by the threshold tier.

2025–26 thresholds	Base tier	Tier 1	Tier 2	Tier 3
Single	$101,000 or less	$101,001 – $118,000	$118,001 – $158,000	$158,001 or more
Family	$202,000 or less	$202,001 – $236,000	$236,001 – $316,000	$316,001 or more

Tier	MLS rate
Base tier	0%
Tier 1	1%
Tier 2	1.25%
Tier 3	1.5%

Note: the family threshold is increased by $1,500 for each MLS dependent child after the first child.

3) How OzMoneyTools estimates it

We use ATO MLS thresholds and apply the tier rate to your MLS income. Family thresholds are applied when you indicate a spouse or dependants.

To get closer estimates for MLS, enable Income components (advanced) in the calculator and enter fringe benefits, investment losses, and reportable super contributions if they apply.

4) Related guides for MLS, levy and tax checks

Take-home pay calculator Medicare levy calculator & thresholds Australian tax rates guide Income tax calculator Australia

FAQ

What are the Medicare Levy Surcharge thresholds for 2025-26?

For 2025-26, single thresholds are up to $101,000 for the base tier, then $101,001 to $118,000, $118,001 to $158,000, and $158,001+ for higher tiers. Family thresholds start at $202,000.

Is MLS the same thing as the Medicare levy?

No. The Medicare levy is a base levy (generally 2%). MLS is an extra surcharge that only applies if your income is above thresholds and you don’t have eligible private hospital cover.

Do foreign residents pay MLS?

MLS generally applies to Australian residents. If you’re a foreign resident, your Medicare levy and MLS treatment can differ.

What counts as “eligible hospital cover”?

The ATO refers to an appropriate level of private patient hospital cover. If you’re unsure, check with your insurer and the ATO guidance.

Assumptions and checks

MLS outcome depends on the selected tax year and family status inputs.
Private hospital cover must be eligible for MLS purposes.
Use advanced income components for closer tier classification.

Methodology Medicare levy calculator & thresholds Australian tax rates guide

Sources

ATO: MLS income thresholds and rates: ato.gov.au

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