If you're single, with no spouse or dependent children, and your income for surcharge purposes stays at or under $105,000 in 2026–27, you won't pay the Medicare levy surcharge, with or without private hospital cover. That's from the ATO's 2026–27 table, last updated 22 June 2026. It lifts the single threshold from $101,000 to $105,000 and the family threshold from $202,000 to $210,000.
Step over the line without cover and the surcharge doesn't apply to the slice above it. It applies to all of it. A single person on $105,001 with no hospital cover owes $1,050.01 on top of the 2% Medicare levy. Most threshold tables never show you that number.
This is general information, not financial advice. It explains how the ATO says the surcharge works. It doesn't tell you whether to buy private health insurance.
The 2026–27 thresholds
The surcharge has four tiers. The rate rises from 1% to 1.5% as income climbs. The ATO's table for the year that began on 1 July 2026:
| 2026–27 | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single | $105,000 or less | $105,001 – $123,000 | $123,001 – $164,000 | $164,001 or more |
| Family | $210,000 or less | $210,001 – $246,000 | $246,001 – $328,000 | $328,001 or more |
| Surcharge | 0% | 1% | 1.25% | 1.5% |
The ATO adds that the family threshold goes up by $1,500 for each dependent child after the first. A couple with three dependent children has a base threshold of $213,000, which is $210,000 plus two lots of $1,500.
You pay the surcharge on top of the Medicare levy, which is 2% of taxable income (the ATO's tax rates page, last updated 13 August 2026). Without cover, someone in Tier 1 pays 3% in total.
Which year's table applies to you
Each income year has its own table. The 2026–27 figures above are for the year to 30 June 2027, and you'll declare that year in the return you lodge after it ends. A return for 2025–26 uses the 2025–26 table:
| 2025–26 | 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 |
| Surcharge | 0% | 1% | 1.25% | 1.5% |
The rates haven't changed. The income bands have moved up, so the base threshold for a single person is $4,000 higher in 2026–27 and the family one is $8,000 higher.
What it costs in dollars
Here's the surcharge for a single person with no appropriate hospital cover in 2026–27. The table is our arithmetic on the ATO's rates. It assumes taxable income is the only item in income for surcharge purposes, which is simpler than real life.
| Income | Tier | Surcharge | Levy plus surcharge |
|---|---|---|---|
| $105,000 | Base | $0 | 2% |
| $105,001 | 1% | $1,050.01 | 3% |
| $123,000 | 1% | $1,230.00 | 3% |
| $123,001 | 1.25% | $1,537.51 | 3.25% |
| $164,000 | 1.25% | $2,050.00 | 3.25% |
| $180,000 | 1.5% | $2,700.00 | 3.5% |
▶ What the surcharge costs a single person with no cover, 2026–27
The ATO says the rate is charged on your taxable income, your total reportable fringe benefits and any amount on which family trust distribution tax has been paid. The tier comes from a wider figure, your income for surcharge purposes, which is covered next.
Want your own figure? The Medicare levy surcharge calculator works it out from your taxable income.
What counts as income for the surcharge
The ATO calls it income for MLS purposes. It's not the same as taxable income. For you, and your spouse if you have one, it adds up:
- Taxable income.
- Reportable fringe benefits.
- Total net investment losses, which is net financial investment losses plus net rental property losses.
- Reportable super contributions, which is reportable employer super contributions plus deductible personal super contributions.
- If you have a spouse, their share of the net income of certain trusts that hasn't been included in their taxable income.
The ATO says to leave out any assessable first home super saver released amount. Exempt foreign employment income is added to taxable income if your taxable income is $1 or more.
That list is why a modest salary can still land in a tier. Here's the ATO's own 2026–27 example. Tom is 35, single, has no dependants and no appropriate hospital cover. His taxable income is $90,000, below $105,000. He also has $27,000 of reportable fringe benefits, so his income for surcharge purposes is $117,000.
- That puts Tom in Tier 1, at 1%.
- The surcharge is worked out on his taxable income plus his reportable fringe benefits.
- His surcharge is $117,000 × 1% = $1,170.
Who counts as family
You're a member of a family for the surcharge if you have a spouse or a child who's an Australian resident and you contribute to their maintenance. The family thresholds then apply, and with a spouse the ATO uses your combined income for surcharge purposes. The ATO's family and dependants page (last updated 21 August 2026) sets out who's in:
- A spouse includes a partner in a relationship registered under a state or territory law, and a de facto partner who lives with you as a couple.
- A child counts as a dependant if they're under 21, or aged 21 to 24 and studying full time. That includes your child, an adopted or newborn child, and a stepchild.
- A foster child isn't counted as a dependant for the surcharge.
- An ex-spouse you pay maintenance or child support to isn't your dependant.
If your circumstances change during the year, the ATO says the surcharge can apply for only the days you were single, or the days you had a spouse or dependent children, depending on your income for those days. Changes in income, spouse, dependants or private health insurance can all change whether you owe it.
What counts as appropriate cover
The surcharge applies if you, your spouse or any of your dependants don't have an appropriate level of private patient hospital cover. The ATO says (last updated 30 April 2026):
- The excess must be low enough. For singles, an excess of $750 or less. For couples and families, $1,500 or less.
- Extras don't count. General cover for dental, optical, physiotherapy and similar isn't private patient hospital cover.
- Travel insurance doesn't count, and neither does cover from an overseas fund.
- Cancelling cover while you travel can leave you liable for the surcharge. The ATO suggests comparing the premium you'd save against the surcharge you might owe.
Your insurer's private health insurance statement shows how many days your policy gave appropriate cover. The ATO says you use that number at item A when you answer the surcharge question in your return.
When you pay it
The surcharge isn't taken out of your pay. The ATO says employers don't withhold it. It works out whether you owe it, and how much, when it processes your tax return. It's added to your Medicare levy and shows as one line on your notice of assessment, called Medicare levy and surcharge. If you owe it, your refund can be smaller or your tax bill bigger.
What you can check now
- Your income for surcharge purposes. Add up the items in the list above. The ATO also has an income tests calculator for this.
- Your cover. Check that your policy is hospital cover, that the excess is $750 or less for a single person or $1,500 or less for a couple or family, and that it covers everyone who counts as family.
- Your surcharge in dollars. The surcharge calculator uses the 2026–27 single thresholds. Your full tax picture shows the Medicare levy and the surcharge together.
- Your rebate. The private health rebate calculator estimates the rebate on a premium, which lowers what cover costs you.
- A proper view. Whether private cover makes sense depends on premiums, your health needs and your finances. A licensed financial adviser, a registered tax agent or your health fund can look at your position.
General information only, not financial advice. Thresholds, rates and rules checked 5 November 2026 against the ATO pages cited above. Our dollar table is our own arithmetic on the ATO rates and assumes taxable income is the only item in income for surcharge purposes, so it shows how the surcharge scales, not what you will pay. Premium costs aren't included. Speak to a licensed financial adviser or registered tax agent about your situation.