Medicare levy: the 2% and who pays less
The Medicare levy is 2% of your taxable income. Most taxpayers pay the full 2%. A low-income shade-in reduces or removes it for smaller incomes. You pay nothing up to $28,011. Between $28,011 and $35,013 the levy phases in at 10c for each dollar over $28,011. Above $35,013 the full 2% applies. These are the latest published thresholds, from 2025-26. The ATO sets each year's thresholds retrospectively, so the 2026-27 figures are confirmed later. The levy is worked out on taxable income and is separate from income tax and from any HELP repayment. This is general information, not advice.
| Taxable income | Medicare levy |
|---|---|
| Up to $28,011 | Nil |
| $28,011 – $35,013 | 10c for each $1 over $28,011 (shade-in) |
| Over $35,013 | 2% of taxable income |
Seniors and pensioners entitled to SAPTO have higher thresholds: nil up to $44,268, shading in to $55,335. The levy is separate from the Medicare levy surcharge, which only applies without private hospital cover. See the effect on any salary with the take-home calculator.
Frequently asked
- Who pays the Medicare levy?
- Most Australian resident taxpayers pay 2% of taxable income. Lower incomes pay less or nothing under the shade-in. You pay nothing up to $28,011, a reduced amount to $35,013, then the full 2%.
- How does the shade-in work?
- Below $28,011 you pay no levy. Between $28,011 and $35,013 it phases in at 10c for each dollar above $28,011. Once your taxable income passes $35,013, the full 2% applies.
- Are these thresholds the 2026-27 ones?
- They are the latest published thresholds, from 2025-26. The ATO confirms each year's levy thresholds retrospectively, so 2026-27 figures are set later. We update the page when the new thresholds are published.