New Threshold
$101k
Single threshold for 2025–26
Up from $93,000 — biggest jump since 2014–15. Family: $202,000 + $1,500 per child after the first. Income for MLS purposes includes salary, RFB, RESC and net investment losses.
ATO 2025–26 Thresholds
Earn over $101,000 without private hospital cover and the ATO adds a Medicare Levy Surcharge to your tax bill — up to 1.5% of your full income, not just the bit above the threshold.
2025–26 ATO thresholds, family adjustments, hospital-cover break-even — instant, private, free.
Use your income for MLS purposes — taxable income plus reportable fringe benefits (RFB), reportable super (RESC), net investment losses, and exempt foreign income.
Held an appropriate hospital policy (not extras-only) for the entire income year?
Enter your income and household, then click Calculate to see your annual surcharge, monthly impact, and whether private cover would save you money.
Any MLS-compliant hospital policy (not extras-only, excess ≤ $750 single / $1,500 family) fully exempts you from the surcharge for the days it's held. Three places Australians shop and compare.
Affiliate disclosure: Velofy may earn a commission if you take out a policy through these links — your premium is unchanged. We don't sell hospital cover ourselves and don't recommend a specific insurer. Always read the Product Disclosure Statement and check the policy meets the ATO's MLS-exemption criteria (basic-tier hospital, max excess $750 single / $1,500 family).
MLS is an extra 1%–1.5% income-tax penalty for higher earners without private hospital cover — separate from the standard 2% Medicare Levy everyone pays. Four numbers decide what you owe.
Up from $93,000 — biggest jump since 2014–15. Family: $202,000 + $1,500 per child after the first. Income for MLS purposes includes salary, RFB, RESC and net investment losses.
MLS applies to your full income, not the excess. $118,001 = $1,475 surcharge; $118,000 = $1,180. The second cliff hits $395 at the $158,001 Tier 3 boundary.
Must be an AU-registered hospital policy. Extras-only — dental, optical, physio — does not exempt you.
Partial-year cover only exempts the days held. Starting mid-year means daily-apportioned MLS for the gap.
Deeper read: full breakdown in our MLS explainer, or model your full tax position with the Velofy tax calculator.
Three tiers apply for 2025–26. The rate is multiplied by your full income for MLS purposes — not just the bit above the threshold. Family thresholds rise by $1,500 per dependent child after the first.
| Tier | Single Income | Family Income | Surcharge Rate |
|---|---|---|---|
| Base | Up to $101,000 | Up to $202,000 | Nil |
| Tier 1 | $101,001 – $118,000 | $202,001 – $236,000 | 1.0% |
| Tier 2 | $118,001 – $158,000 | $236,001 – $316,000 | 1.25% |
| Tier 3 | $158,001 and above | $316,001 and above | 1.5% |