Australia’s compulsory HELP and HECS student loan repayments changed fundamentally from the 2025-26 financial year: the old flat-percentage-on-total-income system was replaced by a marginal repayment model. Under the new rules, you only repay a percentage of the income that sits above each threshold — not your entire repayment income. For 2026-27, the first threshold rises to $69,528, meaning anyone earning below that amount repays nothing. Someone earning $80,000 repays roughly $1,571 across the year, while at $130,000 the repayment is about $9,070. This guide breaks down the 2026-27 thresholds, explains how marginal repayments differ from the old system, and provides worked examples to help you estimate your own obligation.
How the Marginal Repayment System Works
Before 2025-26, HELP repayments were calculated as a flat percentage of your total repayment income. If your income crossed into the 4% band, you paid 4% on everything — which created cliff effects where a one-dollar income increase could trigger hundreds of dollars in extra repayment.
From 2025-26 onward, the system works like income tax: each dollar is assessed only within its bracket. The 2026-27 brackets are:
- $0 to $69,528: No repayment.
- $69,529 to $129,717: 15% of the amount above $69,528.
- $129,718 to $186,050: $9,028 plus 17% of the amount above $129,717.
- $186,051 and above: 10% of total repayment income.
Repayment income equals your taxable income plus any reportable fringe benefits, reportable super contributions, and certain other add-backs. It is not simply the number on your PAYG summary; check your ATO notice of assessment or myGov account for your specific figure.
Worked Examples for 2026-27
Salary $75,000: Income above threshold = $75,000 − $69,528 = $5,472. Repayment = 15% × $5,472 = $820.80 for the year.
Salary $100,000: Income above first threshold = $100,000 − $69,528 = $30,472. Repayment = 15% × $30,472 = $4,570.80. Total income is below $129,717, so only the first tier applies.
Salary $140,000: First tier: $129,717 − $69,528 = $60,189 × 15% = $9,028.35. Second tier: $140,000 − $129,717 = $10,283 × 17% = $1,748.11. Total repayment = $10,776.46.
Salary $200,000: This income exceeds $186,050, triggering the 10% flat rate on the entire repayment income. Repayment = 10% × $200,000 = $20,000.
Voluntary Repayments and Indexation Strategy
Your HELP debt is indexed to inflation (the Consumer Price Index) on 1 June each year, before compulsory repayments credited through the tax system are applied. Making a voluntary repayment before 1 June can reduce the balance that gets indexed. There is no penalty for early or extra repayments, and you can make them via BPAY or your myGov account at any time. This is worth considering if inflation is running above the interest rate you would earn keeping the cash in a savings account.
Interaction with the Medicare Levy Surcharge
HELP repayments do not count as tax for MLS purposes. The MLS is calculated on your taxable income and various reportable amounts independently of HELP. However, because both HELP repayments and the MLS reduce your take-home pay, you should model them together when budgeting. Our companion article on the Medicare Levy and MLS covers those rules in full.
Frequently Asked Questions
What counts as repayment income?
Repayment income is your taxable income plus total reportable fringe benefits amounts and reportable super contributions. If your employer provides salary-packaged benefits or makes extra super contributions on your behalf, those amounts are added back for HELP purposes. Your myGov account shows your repayment income each year.
Do I still repay HELP if I move overseas?
Yes. From 2017, Australian residents who move overseas with a HELP debt are required to make compulsory repayments based on their worldwide income, reported through the same income tiers. You must lodge an overseas levy declaration with the ATO.
When does my employer start withholding HELP amounts?
Once you notify your employer through the Tax File Number Declaration form that you have a HELP debt, they will withhold additional amounts from your pay. If you do not tick the box, the ATO will still calculate the correct repayment at tax time and you may face a bill rather than having it spread across the year.
What if my income drops below the threshold partway through the year?
Compulsory repayment is calculated on your full-year repayment income. If your employer withheld HELP amounts but your annual income ends up below $69,528, the ATO refunds the withheld amounts as part of your tax return.
Can I salary-sacrifice to get below a threshold?
Salary sacrifice reduces your taxable income but not your repayment income — reportable super contributions are added back. So salary sacrificing into super generally does not reduce your HELP repayment obligation.
Data Sources
All thresholds and rates are drawn from the ATO’s published HELP and HECS repayment schedules, effective from 1 July 2026. The marginal repayment structure was introduced by legislation passed in 2024 and applies from the 2025-26 income year.
- ATO — HELP and HECS repayment thresholds and rates: https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/repaying-your-loan
- ATO — Repayment income definition: https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/repaying-your-loan/repayment-income
- ATO — Overseas repayments: https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/overseas-repayments
- ATO — Voluntary repayments: https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/voluntary-repayments
- StudyAssist — Australian Government: https://www.studyassist.gov.au/
Data current as at July 2026. Indexation rates and repayment thresholds are updated annually; verify with the ATO before relying on these figures.
Disclaimer
This article provides general information only and does not constitute financial, tax, or legal advice. Your HELP repayment obligation depends on your individual circumstances and repayment income. Confirm your specific obligations with the Australian Taxation Office or a registered tax professional.