Medicare levy surcharge on $110,000: tier 1, just over the line
A single income of $110,000 sits just above the 2026-27 threshold. The calculator compares the 1 % surcharge with the cheapest policy for your state, age and loading.
The cheapest exempt cover costs less than the surcharge by
$67
Surcharge $1,100 against $1,033 of cover: ahm health insurance, ambulance hospital (basic) (Basic, $750 excess), $102.60 a month before rebate.
| Income tested: $110,000 | Tier 1, 1.00 % |
| Surcharge without cover, you | $1,100 |
| Cheapest exempt policy, full premium | $1,231 |
| Rebate (16.079 %) | -$198 |
| Net cost of the policy | $1,033 |
| Income from which cover is cheaper | $105,500 |
Premiums: PrivateHealth.gov.au file of 2026-10-01, 435 open policies that avoid the surcharge for this cover type in NSW and ACT. Premiums change on 1 April 2027.
Prepared by Radif Partners · How the figures are built · thresholds read on ato.gov.au, premiums from privatehealth.gov.au data · not tax advice
A single person whose income for MLS purposes is $110,000 in 2026-27 is $5,000 over the threshold of $105,000, which puts them in tier 1. Without an appropriate level of hospital cover for the whole year, the surcharge is 1 % of taxable income and reportable fringe benefits: $1,100 if all $110,000 is of that kind. Crossing the threshold also cuts the rebate on any policy you hold, from 24.118 % to 16.079 % for people under 65. Even so, the cheapest exempt single policy costs less than the surcharge in every state in the PrivateHealth.gov.au file of 1 October 2026, though only just in some: in New South Wales $1,033 a year after the rebate, $67 under the surcharge; in the Northern Territory $396. A loading from a late start can tip the balance the other way at this income.
State by state at $110,000
| State or territory | Surcharge without cover | Cheapest policy, full premium | After the tier 1 rebate | Difference |
|---|---|---|---|---|
| NSW and ACT | $1,100 | $1,231 | $1,033 | cover $67 cheaper |
| Victoria | $1,100 | $1,225 | $1,028 | cover $72 cheaper |
| Queensland | $1,100 | $1,236 | $1,037 | cover $63 cheaper |
| South Australia | $1,100 | $1,186 | $995 | cover $105 cheaper |
| Western Australia | $1,100 | $946 | $794 | cover $306 cheaper |
| Tasmania | $1,100 | $1,205 | $1,011 | cover $89 cheaper |
| Northern Territory | $1,100 | $472 | $396 | cover $704 cheaper |
The surcharge is the same everywhere, $1,100, because it is a federal tax. Premiums are not. In the east the margin is thin: in Queensland the cheapest exempt policy saves $63 a year, which a modest premium rise on 1 April could erase. In Western Australia and the Northern Territory the gap is wide.
Five thousand dollars over the line
At this income the question people ask is whether they can get back under $105,000. Income for MLS purposes is taxable income plus reportable fringe benefits, reportable super contributions and net investment losses. Salary sacrificing into super does not help, since the sacrificed amount comes back in as a reportable super contribution. Deductions you are entitled to do lower taxable income, and so the income tested. The income for MLS purposes page lists every item, and the salary packaging page covers the fringe benefits case.
Rebuild your income for MLS purposes
Your income for MLS purposes
$110,000
| Taxable income | $98,000 |
| Fringe benefits | +$0 |
| Super contributions | +$12,000 |
| Investment losses added back | +$0 |
If you already hold cover: the rebate step
For someone who already has hospital cover, crossing $105,000 costs nothing in surcharge but something in rebate. On the cheapest NSW single policy, $1,231 a year before the rebate, the fall from 24.118 % to 16.079 % means about $99 more to pay. On a policy three times dearer, three times as much. The rebate entitlement is settled on your tax return from your actual income for the year, so a pay rise in March can still move you into tier 1 for the whole period from 1 July. Update your income tier with your insurer when you expect to cross the line: it avoids a bill when you lodge.
Age changes the rebate, not the surcharge
The surcharge at $110,000 is the same at 30 or at 70. The rebate is not: at tier 1 it is 16.079 % under 65, 20.098 % from 65 to 69 and 24.118 % from 70, based on the oldest person on the policy. A single person aged 68 in NSW would pay $984 for the cheapest policy after the rebate, against the same $1,100 of surcharge. For a couple, an income of $110,000 on its own is far below the family threshold of $210,000: the surcharge only applies if the combined income is over that line, which is the subject of the couples page.
Joining part way through the year
The surcharge is charged by the day. Someone at $110,000 who takes out hospital cover on 1 January pays about $552 for the six months without it, not $1,100. What has already passed cannot be undone, but every month of cover from now on replaces a month of surcharge. The part-year page compares joining now with staying uncovered to 30 June.
What changes next year
Thresholds are indexed each 1 July. The 2026-27 line of $105,000 was $101,000 in 2025-26, so an income that does not rise can fall back under the threshold in a later year. Premiums and rebate rates change on 1 April. A comparison made at $110,000 today is worth redoing each year, especially here, where the gap between the two options is a few dollars a week.