The Medicare levy helps fund Australia’s public health system. Most residents pay it, so it directly affects take-home pay alongside PAYG withholding.
Standard Medicare levy rate: 2% of taxable income. This site applies that flat rate in its simplified model.
Who pays it and on which income? Most Australian residents for tax purposes pay the levy on taxable income. Non-residents generally do not. Taxable income is your income after allowable deductions.
Low-income reductions and exemptions (high level): The ATO provides reductions or exemptions for some low-income earners and specific circumstances. This calculator keeps it simple and does not model those thresholds.
How this calculator applies the Medicare levy: It applies a flat 2% to taxable income when the tax-free threshold toggle is on. Turn the toggle off to see results without the levy in this model.
Why your payslip may show a different figure: Employers can apply additional withholding, and ATO formulas include low-income reductions and rounding that this simplified model does not capture.
Call to action: Use the Medicare levy explanation page for a quick refresher, and run the main pay and tax calculator to see the levy alongside PAYG withholding.