HECS / HELP Repayment
New marginal system from 1 July 2025
How HECS and HELP repayments work in FY2026-27
Since 1 July 2025, compulsory repayments have used a marginal system, the same shape as income tax brackets, instead of a flat percentage of your entire income. You repay only on the income above the threshold, and nothing at all below $69,528.
That change removed a genuine cliff. Under the old rules, crossing a threshold by a single dollar reset your rate against your whole income and could cost hundreds of dollars in one step. Now an extra dollar earned above the threshold costs 15c and no more.
| Repayment income (FY2026-27) | Compulsory repayment |
|---|---|
| $0 to $69,528 | Nil |
| $69,529 to $129,717 | 15c for each $1 over $69,528 |
| $129,718 to $186,050 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of your total repayment income |
The thresholds are indexed each year. For FY2025-26 the minimum was $67,000. Source: ATO, study and training loan repayment thresholds and rates, checked 21 August 2026.
Example repayments, FY2026-27
| Repayment income | Annual repayment | Per week | Share of income |
|---|---|---|---|
| $70,000 | $71 | $1.36 | 0.10% |
| $90,000 | $3,071 | $59.05 | 3.41% |
| $110,000 | $6,071 | $116.75 | 5.52% |
| $130,000 | $9,076 | $174.54 | 6.98% |
| $150,000 | $12,476 | $239.93 | 8.32% |
| $190,000 | $19,000 | $365.38 | 10.00% |
Repayment income is broader than salary. It is your taxable income plus reportable fringe benefits, reportable super contributions, net investment and rental losses, and exempt foreign employment income. This tool estimates using taxable income, so if you salary sacrifice or negatively gear, your real repayment will be higher than shown.
Indexation is separate from repayment
Your balance is indexed on 1 June each year, and that happens whether or not you made a repayment. Compulsory repayments made through your pay are credited when your return is processed, which is usually after indexation has already been applied for that year. This is the single most misunderstood part of the system. The full guide explains the timing and what a voluntary repayment does about it.
All your study loans are repaid as one
People often ask which loan gets repaid first when they hold more than one. The answer is that the question does not arise in the way they expect. HELP in all its forms (HECS-HELP, FEE-HELP, OS-HELP, SA-HELP), VET Student Loans, and the older SFSS and student start-up loans are combined into a single accumulated study and training loan balance, and one compulsory repayment is worked out against your repayment income for the lot.
You do not repay each loan separately, and holding two loans does not double the repayment. It does mean a larger balance being indexed, so it takes longer to clear.
Living or working overseas
Moving overseas does not pause the debt. If you are a non-resident for tax purposes with a study loan, you still have an obligation to report your worldwide income to the ATO each year, and a compulsory repayment can be assessed on it using the same thresholds that apply here. You also need to notify the ATO if you intend to move overseas for 183 days or more in any 12 month period.
The balance continues to be indexed on 1 June whether or not you are in the country. Leaving Australia with a study debt and no reporting is one of the more common ways people accumulate an unexpected liability.
Your last year of repayments
Because your employer withholds against the debt through the year but nothing is credited until your return is processed, the final year is where people accidentally overpay. You can keep having extra tax withheld against a balance that a single earlier payment has already cleared.
Two things help. Check the balance in ATO online services through myGov rather than relying on last year's notice of assessment, because it will not reflect this year's withholding. And once the debt is genuinely cleared, give your employer an updated withholding declaration so the extra withholding stops. If you do not, the excess is not lost, it simply comes back at tax time as a refund instead of staying in your pay.
Source: ATO, study and training loan repayment thresholds and rates. Checked 21 August 2026. TaxSnap is a calculator, not a tax agent: see the disclaimer and where every figure comes from.
Frequently Asked Questions
What is the HECS/HELP repayment threshold for FY2026-27?
You make no compulsory repayment if your repayment income is below $69,528. Above that, repayment is worked out marginally: 15c for each dollar over $69,528, then 17c above $129,717. It was $67,000 in FY2025-26.
How is HECS calculated now?
Since 1 July 2025 it is marginal. You repay only on income above the threshold, not on your whole income. On $90,000 in FY2026-27 that is about $3,071 a year, or $118 a fortnight.
Is the repayment based on my taxable income?
It is based on repayment income, which is your taxable income plus reportable fringe benefits, reportable super contributions, net investment and rental losses, and exempt foreign employment income. Salary sacrificing into super lowers your taxable income but does not lower your repayment income.
Does HECS come out of my pay automatically?
Your employer withholds extra tax through the year once you declare the debt on your TFN declaration, but that money is not paid against your loan as it goes. It sits as credit against your tax bill, and the actual compulsory repayment is only calculated and applied when your return is processed.
Should I make a voluntary repayment?
A voluntary repayment made before 1 June reduces the balance that gets indexed, which is the only way to avoid indexation on that amount. Whether it beats using the money elsewhere depends on the indexation rate in that year against your alternatives. We do not give financial advice, so this is a question for a licensed adviser.
I have more than one study loan. Do I repay them separately?
No. HELP, VET Student Loans and the older SFSS are combined into a single accumulated study and training loan balance, and one compulsory repayment is calculated against your repayment income for the whole amount.
Do I still repay HECS if I move overseas?
Yes. Non-residents with a study loan must report worldwide income to the ATO each year and can be assessed for a compulsory repayment on it. You also need to notify the ATO if you intend to be overseas for 183 days or more in a 12 month period. The balance keeps being indexed either way.
How do I stop HECS being withheld once my debt is paid off?
Give your employer an updated withholding declaration saying you no longer have a debt. Check the current balance in ATO online services through myGov first, because your last notice of assessment will not reflect this year's withholding.