Medicare Levy Calculator Australia (2025–26 ATO thresholds)
Estimate the Medicare levy using the standard 2% resident rate, current ATO low-income thresholds, family shade-in rules, and the main exemption edge cases. Use this page to check whether your levy should be the full 2%, reduced, or $0 before comparing it with your take-home pay result.
Quick answers
- The standard Medicare levy rate in Australia is generally 2% of taxable income for Australian residents.
- The main Medicare levy threshold for singles in 2025-26 is $28,011, with the levy shading in until $35,013.
- Family Medicare levy thresholds for 2025-26 start at $47,238 to $59,047and increase by $4,338 on the lower threshold and $5,423 on the upper threshold for each dependent child.
- At $80,000 taxable income, a resident with no reduction or exemption would usually pay an estimated $1,600 Medicare levy.
- The Medicare levy is different from the Medicare Levy Surcharge (MLS).
1) When it applies
In general, Australian residents pay the Medicare levy. Foreign residents generally don’t pay the Medicare levy.
There are also separate rules for Medicare levy exemptions (not yet fully modelled in OzMoneyTools).
2) Low‑income reduction (singles)
The ATO publishes yearly thresholds. If your taxable income is at or below the lowerthreshold, the levy is $0. Between the lower and upper thresholds, the levy is reduced (shades in).
| 2025–26 category | Lower threshold | Upper threshold |
|---|---|---|
| All other taxpayers | $28,011 | $35,013 |
3) Low‑income reduction (families)
If you have a spouse or dependent children, the ATO uses family taxable incomethresholds. The thresholds increase with dependent children.
| 2025–26 family thresholds | Amount |
|---|---|
| Lower family threshold | $47,238 |
| Upper family threshold | $59,047 |
| Add per dependent child (lower) | +$4,338 |
| Add per dependent child (upper) | +$5,423 |
4) How OzMoneyTools estimates it
We apply the standard 2% levy for residents.
When we have confirmed ATO thresholds for a tax year, we apply the low‑income reduction (shade‑in) for singles and families. If thresholds for a year aren’t loaded yet, we default to the full 2%.
If you need exact withholding per pay run, the ATO tax withheld calculator (or payroll software) will be closer than an annual estimate.
5) Medicare levy example
If an Australian resident has $80,000 taxable income and no reduction or exemption applies, the standard Medicare levy estimate is $1,600.
If income falls inside the low-income reduction range, the levy shades in gradually instead of jumping straight from $0 to the full 2%.
6) Related guides for tax, levy and salary checks
FAQ
What is the Medicare levy in Australia?
What is the Medicare levy threshold?
What is the Medicare levy low-income threshold for 2025-26?
Is the Medicare levy the same as Medicare Levy Surcharge (MLS)?
What are the Medicare levy thresholds for families?
Why might my Medicare levy be lower than 2%?
How much is the Medicare levy on $80,000?
Sources
- ATO: Medicare levy and reduction for low-income earners: ato.gov.au
- ATO: Medicare levy reduction thresholds (singles): ato.gov.au
- ATO: Medicare levy reduction – family income: ato.gov.au