Private Health Rebate & Medicare Levy Surcharge Calculator (2026)

Two separate things, often confused

The rebate and the surcharge pull in opposite directions and people frequently treat them as one policy. The rebate is a discount on your premium if you hold private hospital cover — the government pays part of it. The Medicare Levy Surcharge is an extra tax you pay if you do not hold hospital cover and your income is above the threshold.

So above the threshold there are two costs to compare, not one: a premium reduced by the rebate, against a surcharge paid for holding nothing. That comparison is what this calculator is for, and it is why the answer can be that cover is cheaper than going without.

Where the thresholds bite

Both the rebate percentage and the surcharge rate are set by income tier, and the tiers are cliffs rather than slopes. Crossing a threshold by a small amount moves you into a lower rebate and a higher surcharge at the same time, so the effective cost of that last dollar of income can be considerable.

The income test uses income for surcharge purposes, which is broader than taxable income — it adds reportable fringe benefits, reportable super contributions and net investment losses back in. People are frequently over a threshold they did not think they were near, because the figure being tested is not the one on the front of their tax return. Family thresholds also increase for each dependent child after the first.

Age matters, in your favour

Rebate percentages step up at 65 and again at 70 within the same income tier. The increase is not large but it is automatic, and it is worth knowing that a premium comparison done at 64 does not hold at 66.

Lifetime Health Cover is the part that is easy to miss

Lifetime Health Cover loading adds 2% to your hospital premium for every year you are over 30 without cover, up to 70%, and once it applies it stays for ten continuous years of cover before dropping off. It is separate from the rebate and the surcharge and it is not reflected in a simple premium comparison.

This is the reason the decision is not purely a year-by-year one. Someone who takes out cover at 31 and someone who takes it out at 45 do not face the same price for the same policy, and the difference persists for a decade.

What this calculator does not decide

It compares costs. It does not compare cover, and the policies at the cheap end of the market exist largely to avoid the surcharge — many carry significant exclusions and high excesses. A basic policy that satisfies the surcharge test may not cover much that you would actually want covered, which is a separate question from whether it is financially worth holding.

Premiums also change annually, typically each April, and the thresholds are indexed separately. Figures here are for the stated year and should be checked against your own policy and your own income before making the decision.