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. 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.
Thresholds by year
| Year | No levy up to | Full levy above | Thresholds |
|---|---|---|---|
| 2024–25 | $27,222 | $34,027 | Published by the ATO |
| 2025–26 | $28,011 | $35,013 | Published by the ATO |
| 2026–27 | $28,011 | $35,013 | 2025–26 thresholds carried |
The nil threshold rose from $27,222 in 2024–25 to $28,011 in 2025–26, and the point where the full levy starts rose from $34,027 to $35,013. On $30,000 the 2025–26 levy is $199, $79 less than the $278 due under the 2024–25 thresholds.
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 the 2026–27 thresholds?
- No. They are the 2025–26 thresholds. The ATO had not published 2026–27 thresholds when its page was checked on 24 September 2026, so the calculator uses the 2025–26 figures for 2026–27 until it does.