Affects higher income earners without hospital cover
The Medicare Levy Surcharge (MLS) is an additional tax on higher income earners who don’t have hospital cover for themselves and their family. The surcharge is in addition to the Medicare levy of 2% that applies to most taxpayers. No MLS is payable if you take out any of Defence Health’s ADF packages or any other Defence Health hospital cover.
Permanent ADF personnel should note that although you do not need private health cover yourself, if your combined family income is above $202,000, your family will need to take out private hospital cover to avoid the MLS.
2025-2026 income thresholds | ||||
| Income thresholds | Base Tier | Tier 1 | Tier 2 | Tier 3 |
| Singles | $101,000 or less | $101,001 -$118,000 | $118,001 -$158,000 | $158,001 or more |
| Families | $202,000 or less | $202,001 -$236,000 | $236,001 -$316,000 | $316,001 or more |
Medicare Levy Surcharge | ||||
| All ages | 0% | 1% | 1.25% | 1.5% |
Families include single parents and couples, whether married or de facto. For families with children, the thresholds increase by $1,500 for each child after the first. For details on how the annual income for surcharge purposes is calculated, please refer to the Tax Office website link below.
For more information
- Visit the Australian Taxation Office website
- Visit the Private Health.gov website