Why use this calculator
If your income exceeds $93,000 (single) or $186,000 (family) and you don't hold private hospital cover, you pay the Medicare Levy Surcharge — an extra 1% to 1.5% of your income on top of the standard Medicare Levy. This calculator tells you whether it's cheaper to buy hospital cover or just pay the surcharge.
How to use it
Enter your taxable income, the monthly cost of the cheapest hospital cover you've found (use comparison sites like iSelect or Compare the Market for quotes), and whether you're single or a family. The calculator compares your MLS bill against the cost of cover.
The formula
MLS = Income × Rate (1% for $93k-$108k, 1.25% for $108k-$144k, 1.5% above $144k). Annual Premium = Monthly × 12. Saving = MLS − Annual Premium.
Worked examples
$100k income, $130/month hospital cover
MLS = $1,000, cover = $1,560/year — MLS is slightly cheaper but cover has health benefits
$130k income, $110/month hospital cover
MLS = $1,625, cover = $1,320/year — hospital cover saves $305/year
When people use it
- Deciding whether to get private health insurance
- Choosing between hospital cover tiers
- Tax planning before EOFY
- Understanding your Medicare obligations
Tips
- The MLS applies even if you use the public health system — it's a tax, not a fee for service
- Basic hospital cover ('junk policies') can satisfy the MLS requirement — you don't need extras cover
- The MLS threshold for singles is $93,000 (2024-25) — verify annually as it can change
- Lifetime Health Cover loading adds 2% to your premium for every year over 31 you delay getting cover
- Compare hospital cover prices at iSelect, Compare the Market, or the government's Private Health website
Questions people ask
- What is the Medicare Levy Surcharge?
- The MLS is an additional tax of 1% to 1.5% paid by higher-income earners who don't hold private hospital insurance. It's separate from the standard 2% Medicare Levy that most taxpayers pay.
- Does extras cover count towards the MLS?
- No — only hospital cover (with a minimum $750 excess for singles, $1,500 for families) satisfies the MLS requirement. Extras-only cover does not count.
- What if I earn just over the threshold?
- The MLS only applies to the portion of your income above the threshold — but note it's applied to your total income, not just the excess. If your income is $93,001, you pay 1% on the full amount.