Medicare Levy Surcharge changes help lighten tax load 

Australians uncertain about whether or not to get health insurance could find the decision a little easier next week, as of 1 July. 

Those who don’t have Hospital Cover and earn over a certain income threshold get charged the Medicare Levy Surcharge at tax time – a levy of between 1% and 1.5%. For some Australians, this is a major reason for getting health insurance. But from 1 July 2025, the Medicare Levy Surcharge income thresholds are increasing, so you might not get charged as much – or at all – on your 2025/26 taxes if you don’t have Hospital Cover.  

Currently, a single person earning $97,001 or more who does not have Hospital Cover will pay an extra 1% on top of their taxes. But from 1 July, they will only pay that levy if they earn $101,001 or more. For couples, single parents and families, the income threshold is currently $194,001 and will increase to $202,001 after 1 July. 

Australians who need to pay a 1% MLS levy: 

For more information on the Medicare Levy Surcharge changes, including income thresholds for higher MLS levels, visit the ATO web page. For personalised financial advice, talk to an accountant.  

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

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