Compulsory HELP and HECS repayments for the 2026–27 financial year continue under the marginal repayment system introduced in 2025–26. Under this system, repayments are calculated only on the portion of repayment income that exceeds each threshold, rather than as a flat percentage of total income. The 2026–27 thresholds are: no repayment for incomes up to $69,528; a 15% rate on income between $69,529 and $129,717; a 17% rate on income between $129,718 and $186,050; and a 10% flat rate on total repayment income for amounts of $186,051 and above. Repayment income is broader than taxable income and includes reportable fringe benefits, reportable super contributions, and certain other supplementary items. This article explains how the marginal system works in practice, provides worked calculations, and covers the interaction with income tax and the Medicare Levy. For the income tax rates that apply alongside HELP repayments, see Australia’s 2026–27 income tax rates. For detail on the Medicare Levy, see the Medicare Levy and surcharge article.
The marginal repayment system
From the 2025–26 year onward, HELP repayments moved from a flat-rate-on-total-income model to a marginal system. This means each dollar of repayment income is assessed at the rate that corresponds to the bracket it falls into, similar to how income tax works. The practical effect is that crossing a threshold no longer triggers a disproportionate jump in the repayment amount. Under the old model, earning one extra dollar could move a person into a higher bracket and increase their repayment by thousands. The marginal system eliminates that cliff effect.
The ATO applies the following brackets for 2026–27:
- Repayment income $0 to $69,528: no compulsory repayment.
- Repayment income $69,529 to $129,717: 15% of the amount exceeding $69,528.
- Repayment income $129,718 to $186,050: $9,028 plus 17% of the amount exceeding $129,717.
- Repayment income $186,051 and above: 10% of total repayment income.
The figure $9,028 represents the cumulative repayment at the top of the second bracket (15% of $60,189). Anyone whose repayment income reaches $186,051 or more pays a flat 10% on the entire amount, reverting to a total-income calculation at the highest tier.
What counts as repayment income
Repayment income is not the same as taxable income. The ATO defines it as the sum of taxable income plus any reportable fringe benefits amounts, reportable super contributions, and certain other items such as net investment losses added back and exempt foreign employment income. Individuals with salary-packaged benefits or employer super contributions above the mandated minimum should be aware that these amounts can push repayment income well above taxable income and into a higher repayment bracket. The ATO provides a detailed definition in its HELP repayment guidance, and payroll systems incorporate repayment income calculations when determining withholding amounts.
Worked examples
The following examples assume the taxpayer has no reportable fringe benefits or reportable super contributions, so repayment income equals taxable income.
A graduate earning $75,000: repayment income falls in the 15% bracket. The repayment is 15% of ($75,000 − $69,528) = 15% of $5,472 = $821.
A professional earning $140,000: the first $69,528 attracts no repayment. The portion from $69,529 to $129,717 attracts 15%: $60,189 × 15% = $9,028. The remaining $10,283 ($140,000 − $129,717) attracts 17%: $1,748. Total repayment: $10,776.
A high-income earner on $200,000: repayment income exceeds $186,051, so the flat 10% rule applies. Repayment is 10% of $200,000 = $20,000.
These repayments are in addition to income tax and the Medicare Levy. A person on $140,000 would pay approximately $34,520 in income tax (2026–27 rates), $2,800 in Medicare Levy, and $10,776 in HELP repayments, leaving a total liability of around $48,096.
Interaction with PAYG withholding
Employers are required to withhold additional amounts for HELP debt through the PAYG system. Employees should have indicated their HELP debt on their Tax File Number Declaration form. The ATO publishes weekly, fortnightly, and monthly tax tables that combine income tax withholding with HELP repayment withholding, so the correct amount is deducted from each pay period. At year-end, the actual compulsory repayment is calculated on the tax return, and any difference between amounts withheld and the actual liability is refunded or billed. Employees earning income from multiple sources should be aware that each employer withholds based only on the income they pay, which may result in an end-of-year shortfall.
Voluntary repayments and indexation
Compulsory repayments are applied to HELP debts after indexation is calculated on 1 June each year. The debt is indexed to the Consumer Price Index. Voluntary repayments made before indexation is applied can reduce the balance subject to indexation, and the ATO allows voluntary repayments at any time via BPAY or credit card. Since the marginal system has lowered compulsory repayments for many earners, individuals who wish to clear their debt faster may need to make larger voluntary contributions than under the old flat-rate model.
Frequently asked questions
Does the marginal system mean I pay less than under the old flat-rate system? For most earners, yes. The marginal system calculates repayment only on income above the threshold, so repayments are generally lower than the old flat-percentage-on-total-income approach except at very high incomes where the 10% flat rate applies.
What if my income fluctuates during the year? The compulsory repayment is calculated on your full-year repayment income as reported on your tax return. PAYG withholding smooths this across pay periods, but the actual liability is determined annually.
Are HELP debts written off after a certain period? HELP debts are not written off based on time. They are extinguished only upon repayment in full or death. There is no statute of limitations on HELP debt.
Do I still have to repay if I move overseas? Yes. Australian residents living overseas with a HELP debt are required to lodge returns or submit an overseas levy notification and make repayments based on their worldwide income.
How do I check my HELP balance? Log into your myGov account linked to the ATO. The account shows your current balance, indexation history, and all compulsory and voluntary repayments.
Data sources
- ATO HELP and TSL repayment thresholds and rates for 2026–27
- ATO study and training support loans tax tables
- Department of Education HELP scheme documentation
- ATO guidance on repayment income definition
- Australian Parliament legislation establishing the marginal repayment system
Disclaimer: This article provides general information only and does not constitute financial, tax, or legal advice. Readers should confirm current rates and thresholds with the Australian Taxation Office or a licensed professional before making decisions. Data current as at July 2026.