Calculate your Medicare levy for the 2024–25 financial year. Includes low-income reductions for singles and families with dependents.
How the Medicare Levy Works in 2025
The Medicare levy funds Australia's universal healthcare system. For the 2024–25 financial year, the standard rate is 2% of your taxable income. However, low-income earners benefit from a reduction or full exemption.
Single Taxpayer Thresholds
| Taxable Income |
Medicare Levy |
| $0 – $26,000 | Nil |
| $26,001 – $32,500 | 10% of income over $26,000 (shade-in) |
| $32,501+ | 2% of taxable income |
Family Threshold
Families have a higher threshold before Medicare levy applies. For 2024–25, the base family threshold is $43,846, increased by $4,027 for each dependent child. The same 10% shade-in applies above this threshold until the standard 2% rate is reached.
Medicare Levy vs Medicare Levy Surcharge
Do not confuse the Medicare levy (2%, paid by most taxpayers) with the Medicare levy surcharge (an additional 1–1.5% only applicable to higher-income earners without private hospital cover). Use our Medicare Levy Surcharge calculator to check whether the surcharge applies to you.
Frequently Asked Questions
What is the Medicare levy rate in Australia?
The Medicare levy is 2% of your taxable income. Most Australian taxpayers pay this levy. Low-income earners may pay a reduced amount or nothing at all depending on whether their income falls below the relevant threshold.
Who is exempt from the Medicare levy?
Singles with taxable income at or below $26,000 pay no Medicare levy. A shade-in applies between $26,001 and $32,500 where you pay 10 cents for every dollar over $26,000. The full 2% applies once income exceeds $32,500.
What is the family Medicare levy threshold for 2024–25?
The family threshold is $43,846 for the 2024–25 financial year, plus $4,027 for each dependent child. If your family income is below this combined threshold, you may be exempt. A shade-in applies at 10% above the threshold until the standard 2% rate is reached.
Do I pay Medicare levy if I have private health insurance?
Yes. Private health insurance does not reduce or remove the standard 2% Medicare levy. However, private hospital cover can help you avoid the Medicare levy surcharge if your income is above $93,000 (singles). These are two separate charges.
How is the Medicare levy calculated on my tax return?
The ATO calculates your Medicare levy as part of your annual income tax assessment. It is based on your taxable income (after deductions) for the full financial year, not your gross salary. Your employer withholds an estimate of it as part of your PAYG withholding throughout the year.
Can I get a Medicare levy reduction as a family?
Yes. If your combined family income is below the family threshold ($43,846 + $4,027 per child for 2024–25), you may qualify for a reduced levy or full exemption. You need to claim this on your tax return — it is not automatically applied by your employer.