Medicare levy surcharge for couples: one test, two bills
Enter both incomes for MLS purposes: the tool finds the household tier, then shows what each partner would pay without hospital cover.
Medicare levy surcharge, 2026-27
$3,188
Tier 2 rate of 1.25 % on 365 days without cover.
| Income tested for the tier | $255,000 |
| Thresholds (base / tier 1 / tier 2) | $210,000 / $246,000 / $328,000 |
| You | $2,250 on $180,000 |
| Partner | $938 on $75,000 |
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 couple, married or de facto, with or without children, is tested on the family threshold: for 2026-27 the surcharge starts when the two partners' incomes for MLS purposes add up to more than $210,000. The combined total also decides the rate, 1 % up to $246,000, 1.25 % up to $328,000 and 1.5 % beyond. Each partner then pays that rate on their own taxable income and reportable fringe benefits, not on the household total, so the bill is split in proportion to income. A couple on $180,000 and $75,000, without cover, pays $2,250 and $938. A partner who had a spouse all year and whose own income for MLS purposes is $28,011 or less pays nothing (2025-26 figure, the latest published). To avoid the surcharge, both partners and every dependant need an appropriate level of private patient hospital cover, ideally on the same couple or family policy.
How the household test works
The ATO runs the test in two steps. First it adds your income for MLS purposes to your spouse's and compares the sum with the family thresholds. That gives the tier and the rate for the household. Then it charges each partner the rate on their own taxable income and reportable fringe benefits, for their own days without cover. The order matters: a high earner with a low-earning partner can end up below the family threshold and pay nothing, while a pair of middle incomes can cross it together.
| Your income | Partner's income | Combined | Tier | You pay | Partner pays |
|---|---|---|---|---|---|
| $125,000 | $125,000 | $250,000 | Tier 2 | $1,563 | $1,563 |
| $160,000 | $90,000 | $250,000 | Tier 2 | $2,000 | $1,125 |
| $200,000 | $50,000 | $250,000 | Tier 2 | $2,500 | $625 |
| $221,989 | $28,011 | $250,000 | Tier 2 | $2,775 | not liable |
The household total is the same in every row, so the rate is the same. Only the split differs. The last row shows the spouse floor at work: the partner on $28,011 is not liable, and the other partner pays on their own income only.
Who counts as your spouse
For MLS purposes your spouse is a person of any sex who is legally married to you, whose relationship with you is registered under a prescribed state or territory law, or who lives with you on a genuine domestic basis as a couple. The ATO treats a spouse as your dependant regardless of their income: if your spouse worked at any time in the year and you had a spouse all year, you are still taken to have maintained them for the whole year. A temporary separation, for a holiday or travel overseas, does not end it. An ex-spouse to whom you pay maintenance is not your dependant.
Try your own split
Medicare levy surcharge, 2026-27
$3,188
| Income tested for the tier | $255,000 |
| Thresholds (base / tier 1 / tier 2) | $210,000 / $246,000 / $328,000 |
| You | $1,750 on $140,000 |
| Partner | $1,438 on $115,000 |
The year you move in, marry or separate
When a couple forms or ends during the year, the M2 instructions split the year into periods. For the days you were single, you are liable if your own income for MLS purposes is over the single threshold and you lacked cover. For the days you had a spouse, you are liable only if your own income for MLS purposes is over the family threshold. The rate is set by your status on 30 June. The ATO gives two 2025-26 examples, with that year's thresholds of $101,000 and $202,000.
- Michael and Michelle separated on 12 October 2025. For the first 104 days each is compared with the family threshold, and neither is liable. For the 262 single days, Michelle's $102,000 is above $101,000; Michael's $69,000 is not. Michelle, single on 30 June, pays the tier 1 rate on her own income for those days: $732.16. Michael pays nothing.
- Alice and Adam married on 17 January 2026. For the first 200 days each is single; Alice's $150,000 is above the single threshold, Adam's $89,000 is not. After the wedding each is compared with the family threshold, and neither is over it. Because Alice is married on 30 June, her rate comes from the couple's combined $239,000, which was tier 2 in 2025-26: 1.25 % on her $142,000 of taxable income for 200 days, $972.60.
If your spouse died during the year and you had no new spouse by 30 June, the ATO asks you to assume you had a spouse for the whole year when working out your income for MLS purposes.
Sharing the bill fairly
Because each partner pays on their own income, the surcharge lands mostly on the higher earner, while a couple policy is usually paid from one account. In the example of the summary, the household would pay $3,188 without cover, $2,250 of it on the $180,000 income. Compare that total with the net price of a couple policy in your state: the calculator on the home page does it with the rebate and any Lifetime Health Cover loading, which on a couple policy is the average of the two partners' loadings.
Sources
The two-step test, the floor and the change-of-status rules are in ATO, M2 Medicare levy surcharge 2026 (tax return instructions); the definition of a spouse and of maintenance in ATO, Family and dependants for Medicare levy surcharge purposes; the thresholds in ATO, Medicare levy surcharge income, thresholds and rates (updated 22 June 2026). PrivateHealth.gov.au confirms that couples are on the family tiers and that every member must be covered.