Medicare levy surcharge on $170,000: the top tier, with no rebate
At $170,000 a single person is in tier 3. There is no rebate left, so the full premium is the price: the calculator sets it against the 1.5 % surcharge.
The cheapest exempt cover costs less than the surcharge by
$1,319
Surcharge $2,550 against $1,231 of cover: ahm health insurance, ambulance hospital (basic) (Basic, $750 excess), $102.60 a month before rebate.
| Income tested: $170,000 | Tier 3, 1.50 % |
| Surcharge without cover, you | $2,550 |
| Cheapest exempt policy, full premium | $1,231 |
| Rebate (0.000 %) | -$0 |
| Net cost of the policy | $1,231 |
| 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 income for MLS purposes of $170,000 in 2026-27 is above $164,001, the start of tier 3. Two things happen there. The surcharge reaches its highest rate, 1.5 % of taxable income and reportable fringe benefits, $2,550 for a full year without hospital cover. And the private health insurance rebate drops to zero, whatever your age: the ATO only pays it when income for surcharge purposes is below the tier 3 threshold. The comparison becomes simple, because the policy costs exactly its full premium, plus any Lifetime Health Cover loading. At this income any single policy with a full premium under $212.50 a month costs less than the surcharge. In New South Wales that covers the median exempt policy, $186.10, and the median policy of the Basic, Basic Plus, Bronze, Bronze Plus, Silver tiers in the PrivateHealth.gov.au file of 1 October 2026.
The full premium is the price
Below tier 3, every comparison between the surcharge and a policy has to take the rebate into account, and the rebate itself changes with income and age. In tier 3 it does not exist. The ATO's eligibility page sets the condition plainly: to receive the rebate, your income for surcharge purposes must be less than the tier 3 threshold. For a single person in 2026-27 that threshold is $164,001. So at $170,000 a hospital policy costs you its full premium, plus any loading, and nothing else enters the sum.
| State or territory | Surcharge without cover | Cheapest exempt policy a year | Median exempt policy a year | Median Gold a year |
|---|---|---|---|---|
| NSW and ACT | $2,550 | $1,231 | $2,233 | $4,502 (dearer) |
| Victoria | $2,550 | $1,225 | $2,353 | $5,019 (dearer) |
| Queensland | $2,550 | $1,236 | $2,325 | $4,830 (dearer) |
| South Australia | $2,550 | $1,186 | $2,250 | $4,292 (dearer) |
| Western Australia | $2,550 | $946 | $1,907 | $4,014 (dearer) |
| Tasmania | $2,550 | $1,205 | $2,297 | $4,470 (dearer) |
| Northern Territory | $2,550 | $472 | $1,298 | $2,695 (dearer) |
The pattern is clear from the table: at $170,000, the median exempt policy costs less than the surcharge in 7 of the 7 regions, while a median Gold policy costs more in 7 of them. The tax pays for mid-range cover at this income, not for the top tier.
Test your own premium at tier 3
The cheapest exempt cover costs less than the surcharge by
$30
| Income tested: $170,000 | Tier 3, 1.50 % |
| Surcharge without cover, you | $2,550 |
| Your policy, full premium | $2,520 |
| Rebate (0.000 %) | -$0 |
Extras lose their rebate too
The rebate applies to hospital, general treatment and ambulance policies, so its end in tier 3 is felt on extras as well. An extras policy costing $1,200 a year, which got $96 of rebate in tier 2, gets nothing here. Extras do not remove the surcharge in any case: only hospital cover does.
Getting back under the line
You are $6,000 above the tier 2 ceiling of $164,000, where the surcharge would be $2,050 and the rebate 8.038 %. Salary sacrifice into super does not lower your tier, because reportable super contributions count in income for MLS purposes; it does lower the base the rate is charged on. Deductions you are entitled to lower taxable income, and so both. The income for MLS purposes page has the components, and the $150,000 page shows how the mix of income changes the bill in tier 2.
Age brings no rebate here
Below tier 3, people aged 65 and over receive a higher rebate than younger ones, up to 32.158 % at the base tier from age 70. In tier 3 every age band gets 0 %. The proposal before Parliament to move the over 65 rates down to the under 65 ones from 1 April 2027 would therefore change nothing at this income: the tier 3 rebate is already zero in every row. The surcharge, likewise, does not depend on age. A retiree whose taxable income is $170,000 faces the same $2,550 as a salaried worker on the same income. The over 65 page covers the lower tiers, where the proposal does matter.
Couples at this income
For a couple, $170,000 on one side is not tier 3 unless the combined income is over $328,000. With a partner earning $60,000, the couple's $230,000 is in tier 1 of the family scale, with a rebate of 16.079 %. The family $230,000 page works through that case with children.