HECS-HELP Repayment Thresholds Explained (2026-27)

TL;DR

Compulsory repayments toward a HECS-HELP, FEE-HELP, VET Student Loan or SA-HELP debt moved to a marginal system on 1 July 2025. This is current law, not a proposal. Only the repayment income above the minimum threshold is charged, so crossing a threshold no longer triggers a percentage of your entire income. For the 2026-27 income year nothing is payable up to $69,528; above that it is 15c in the dollar, then 17c, with a flat 10% of total income from $186,051. For 2025-26 the equivalent figures are $67,000 / $125,000 / $179,286.

The old "whole-of-income" ladder — 1.0% at $54,435 rising to 10.0% at $159,664, applied to your entire income — was the 2024-25 schedule and earlier. If you are reading an article or a calculator that presents it as current, it is out of date.

Two practical points sit on top of that:

Repayment income is broader than your taxable income. It adds reportable fringe benefits, reportable employer super contributions, salary-sacrificed personal super, total net investment loss (negatively geared property), and exempt foreign employment income. It excludes any assessable First Home Super Saver amount released to you. Salary packaging that lowers your taxable income generally does not lower your repayment income.
Indexation is now the lower of CPI and WPI, applied each 1 June. Voluntary repayments made before 1 June reduce the indexed base; repayments made after 1 June apply only to the post-indexation balance.

The HECS-HELP Repayment Calculator holds a separate ATO-published schedule for each income year, so you can check 2026-27, 2025-26, or the old 2024-25 ladder if you are amending that year.

How the HECS-HELP repayment thresholds actually work

The Australian Taxation Office publishes the schedule for each income year. From 2025-26 onward it is a marginal schedule with four rows rather than an eighteen-rung ladder.

2026-27:

Repayment income	Repayment on this income
$0 – $69,528	Nil
$69,529 – $129,717	15c for each $1 over $69,528
$129,718 – $186,050	$9,028 plus 17c for each $1 over $129,717
$186,051 and over	10% of your total repayment income

2025-26:

Repayment income	Repayment on this income
$0 – $67,000	Nil
$67,001 – $125,000	15c for each $1 over $67,000
$125,001 – $179,285	$8,700 plus 17c for each $1 over $125,000
$179,286 and over	10% of your total repayment income

Two features of the schedule are worth understanding.

The cliff is gone below the top band. Under the old system, moving from $94,503 (5.0% band, repayment $4,725) to $94,504 (5.5% band, repayment $5,198) cost $472 for one dollar of extra income. Under the marginal system the first dollar over the threshold costs 15 cents. The ATO's own illustration: Grace earns $80,000 in 2025-26 and would have paid $2,800 under the old rules; she now pays 15% of the $13,000 above $67,000, which is $1,950. If you have been declining shifts or deferring a pay rise to stay under a HECS threshold, that reason no longer exists.

The top band is still a flat rate on your whole income. At $186,051 and above (2026-27) the 10% applies to everything, not to a slice. The boundary is set where the two methods nearly meet — at $186,050 the marginal calculation gives $18,604.61, and at $186,051 the flat calculation gives $18,605.10 — so there is no meaningful jump, but the mechanic is different. The ATO notes there was no change for people earning $179,286 or more in 2025-26.

The schedule moves every year. The thresholds are indexed in line with average weekly earnings and the ATO usually publishes the next year around May or June. Always check which income year a table belongs to before using it — the ATO's page carries a caption on each table for exactly this reason.

What "HELP Repayment Income" includes

This is where the calculator and your payslip can disagree. HELP Repayment Income (HRI) is defined in the Higher Education Support Act 2003 and the Trade Support Loans Act 2014, and it is broader than the taxable income on your PAYG payment summary.

HRI = taxable income

reportable fringe benefits (grossed up at the type 2 factor of 1.8868)
reportable employer super contributions
salary-sacrificed personal super (a subset of the above for most employees)
total net investment loss (rental property losses, share margin loan interest, etc.)
exempt foreign employment income.

The intent is to treat all of these in the same way as ordinary salary for HELP purposes. A doctor working for a public hospital who packages $9,010 of meal entertainment plus $15,899 of living expenses can shave a meaningful amount of taxable income off their PAYG summary; the gross-up still ends up in their HRI. A negatively geared investor with a $20,000 rental loss reduces their taxable income by $20,000 — and adds $20,000 to their HRI. This single mechanic catches a lot of high-income borrowers off-guard.

Indexation: 1 June, lower of CPI and WPI

HELP balances are indexed once per year on 1 June. Before the 2024 reform, the rate was straight CPI (Consumer Price Index) for the year ending 31 March. CPI peaked at 7.1% on 1 June 2023 and that single year was the catalyst for the legislative change.

From the 2024 reform onward, indexation is the lower of CPI and WPI (the Wage Price Index, also published quarterly by the ABS) for the year ending 31 March. The change was applied retrospectively from 1 June 2023, generating an automatic credit on most balances during 2024.

Two practical implications:

Voluntary repayments before 1 June lower the indexed base. A $5,000 repayment made on 31 May at a 4% indexation rate saves you $200 of indexation; the same $5,000 paid on 2 June saves you nothing in that cycle.
Indexation only applies to the portion of the loan that has been outstanding for at least 11 months. Newly added unit fees from the most recent semester are ring-fenced from this year's indexation.

Official source

ATO — Study and training loan repayment thresholds and rates — ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds
ATO — Study and training loans – what's new (the marginal system) — ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new
ATO — Study and training loan indexation rates — ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-indexation-rates
Treasury — Cheaper HECS and lower student debt (Budget 2024-25) — treasury.gov.au
Higher Education Support Act 2003 — Part 4-2 (HELP repayment) and Schedule 1A (the indexation formula).

These three are the only documents to rely on. The thresholds you see on bank or comparison websites are quoted from the ATO; if a figure on a third-party site disagrees with ato.gov.au, the ATO is right and the third-party page is stale.

Worked examples

The numbers below use the 2026-27 schedule. The compulsory repayment is calculated on the slice of repayment income above $69,528, except in the top band where the flat 10% applies to the whole amount.

Example 1 — Graduate teacher, NSW public school, single income

Salary (Step 4 NSW Department of Education, 2025): $87,500
Reportable employer super (compulsory 12% SG, no extra): $0 (because compulsory SG is excluded from "reportable" — only voluntary salary-sacrificed amounts above SG count)
No rental property, no fringe benefits.
Repayment income = $87,500.

Only the amount above $69,528 is charged: ($87,500 − $69,528) × 15% = $2,695.80 for the year. PAYG withholding spreads that across the year, roughly $104 per fortnight.

Now add an unexpected $5,000 winter relief allowance. Repayment income becomes $92,500 and the repayment becomes ($92,500 − $69,528) × 15% = $3,445.80 — exactly $750 more, which is 15% of the extra $5,000. Under the old ladder the same $5,000 would have moved the teacher from the 4.5% band to the 5.0% band and cost $687 on top of the repayment already owed on the original salary. That asymmetry is what the reform removed.

Example 2 — Dual-income couple, Melbourne, with a negatively geared investment property

Software engineer salary: $150,000 + 12% SG.
Personal salary sacrifice into super: $15,000 (above SG, so this is "reportable").
Reportable fringe benefits (NFP packaging): $0.
One investment property, net rental loss after depreciation: $18,000.
Taxable income = $150,000 − $15,000 (sal sac) − $18,000 (rental loss) = $117,000.
Repayment income = $117,000 + $15,000 + $18,000 = $150,000.

Calculated on the PAYG summary figure of $117,000, the repayment would look like ($117,000 − $69,528) × 15% = $7,120.80. But the actual repayment income of $150,000 sits in the second band: $9,028 + ($150,000 − $129,717) × 17% = $12,476.11.

That is a $5,355 surprise at tax time relative to what the PAYG withholding has been collecting on the engineer's $117,000 PAYG figure. APRA-regulated lenders will also include the higher figure when assessing a future home loan, so the negative gearing strategy that looks attractive on the income tax line can squeeze borrowing capacity by 6 to 10 times the annual repayment, i.e. $30,000 to $50,000 less that the bank will lend.

The investment-property loss is taken from the Negative Gearing Calculator, and the salary-sacrifice impact comes from the Salary Sacrifice Super Calculator.

Example 3 — Doctor on $230,000 with NFP salary packaging

Public hospital salary (FBT-exempt employer): $230,000 gross.
Living expenses cap: $9,010 of meal entertainment + $15,899 of living expenses, salaried-packaged.
Concessional cap: $30,000 used in full as salary sacrifice into super, of which $26,450 is "reportable employer super" above SG.
No investment property.

Packaged amounts gross-up at 1.8868 (type 2): ($9,010 + $15,899) × 1.8868 = $46,977 of reportable fringe benefits.

Taxable income on the PAYG summary ≈ $230,000 − $24,909 (packaged amounts) − $26,450 (sal sac) = $178,641.

HRI = $178,641 + $46,977 (RFBA) + $26,450 (RESC) = $252,068.

Repayment income is above $186,051, so the flat top rate applies to the whole amount: 10.0% × $252,068 = $25,206.80. This is the one group the 2025 reform left untouched — the top band worked the same way before and after.

The packaged-living-expenses arrangement that saved roughly $7,500 of income tax has zero effect on HECS-HELP. The doctor faces a $25,000-plus repayment line at lodgement. Many junior doctors only discover this when their first ATO Notice of Assessment arrives. The fix is usually either (a) extra PAYG withholding via TFN declaration variation, or (b) parking enough of the salary into a separate account to cover the bill in October.

Common pitfalls

These are the recurring mistakes that show up in our reader emails on this topic.

Assuming salary packaging cuts your HECS-HELP bill. It does not. The whole point of HRI is to claw back the impact of packaging. If you are at a public hospital, charity or PBI and you package living expenses, your HECS-HELP repayment will be calculated on the gross-up, not on the post-package taxable income. Plan the cash flow accordingly.
Forgetting that PAYG withholding is an estimate. Your employer withholds based on your salary at that employer alone. If you have a second job, freelance income, an investment property loss, or any reportable fringe benefits or super, the year-end true-up at lodgement can be a five-figure surprise. If you know you have any of these, ask your employer to withhold extra each pay using the PAYG Withholding Variation TFN form.
Voluntary repayments after 1 June. The window to reduce the indexed base closes on 31 May. After 1 June your repayment lands on the post-indexation balance; the indexation has already been added. If you are planning a mid-year voluntary repayment, bring it forward to late May. The ATO can take a few business days to process a voluntary repayment, so aiming for the third or fourth week of May is the safer plan; leaving it until 30 May has caught more than one borrower out.
Assuming your tax agent has already factored it in. If you are paying for end-of-year tax preparation, ask the tax agent for a written breakdown of your HRI versus your taxable income. The two figures usually differ for anyone with super salary sacrifice, fringe benefits, a rental property or a second job. A quick before-and-after calculation in May means you can budget for any shortfall before lodgement.
Acting on pre-July-2025 advice about the cliff. Plenty of articles, forum posts and calculators still tell you to keep your income under a threshold. That advice is obsolete for everyone under $186,051. Check the date on anything you read about HECS thresholds, and check which income year its table belongs to.
Assuming the 20% debt reduction is still pending. The ATO has finished processing the 20% reduction for all study and training support debts that existed on 1 June 2025. Look at your actual loan account rather than working from a balance you remember.
Lender treatment of HECS-HELP. Most APRA-regulated lenders treat the annual compulsory repayment as a fixed expense in serviceability. The outstanding balance is not treated as a normal debt. So a $5,000 annual repayment can shrink borrowing capacity by $30,000 to $50,000. Some borrowers clear small balances before applying for a home loan; others let it sit and accept the lower borrowing capacity.
Ignoring the gross-up factor for fringe benefits. Type 2 (1.8868) is the factor that applies to most NFP packaging. Type 1 (2.0802) applies where the employer is entitled to a GST credit on the benefit. The ATO's online calculator at ato.gov.au will tell you which factor applies to your specific arrangement.
Double-counting compulsory SG. The 12% Superannuation Guarantee that your employer pays on top of your salary is not in HRI. Only the voluntary salary-sacrifice portion above SG counts as reportable employer super. Some borrowers add the entire SG amount to their HRI and panic; that is wrong.
Using last year's thresholds. The ATO updates the schedule each May or June, and its rates page shows several income years stacked on the same screen. Read the caption above the table before you copy a number out of it: a minimum threshold of $67,000 is 2025-26, and $54,435 is 2024-25. Calculator pages on this site hold each published year separately and never generate an unpublished year by indexing the previous one.

Two more situations worth flagging

Living overseas. Australian residents who move abroad are still required to report worldwide income to the ATO each year using the Overseas Travel Notification. The compulsory repayment applies in the same way as for a resident: HRI is calculated on Australian-equivalent dollars and the same threshold ladder applies. There is no overseas exemption. The ATO publishes the foreign-income reporting guide and the conversion methodology on its website.

Returning to study. New unit fees added during a semester are only added to your HELP balance once the census date passes. Anything added after 31 May is not subject to the 1 June indexation that year, but is subject to the next 1 June cycle if it remains outstanding for at least 11 months. So a Trimester 1 enrolment in a graduate diploma adds units in March; those units sit out the very next 1 June and are first indexed the year after.

Two HELP-style debts. A borrower can have a HECS-HELP debt, a FEE-HELP debt and a VET Student Loan simultaneously. They are pooled for the compulsory repayment calculation — the ATO treats them as one repayment-income trigger — but each carries its own balance and interacts independently with voluntary repayments. The calculator on this site treats them in the same pool, which is consistent with the ATO's Tax return instructions for the relevant labels (M1, M2 and the study and training loan label).

What the reform actually changed, and for whom

The old ladder produced real cliffs. Routine pay rises and salary-sacrifice changes pushed large numbers of borrowers across a band each year, and the jump could be several hundred dollars for a single dollar of income. The marginal system removes that below the top band.

Who is better off:

Under $69,528 (2026-27): no compulsory repayment at all. Under the old ladder, repayments started at $54,435.
Between the threshold and $186,050: repayments are calculated only on the slice above the threshold, and each extra dollar costs a predictable 15c or 17c.
$186,051 and above: unchanged. The flat 10% of total repayment income applies exactly as the old top band did.

What this means in practice is that the planning moves that used to matter — timing a bonus to avoid a band, making a May voluntary repayment specifically to duck under a rung — no longer do, for most people. The remaining reasons to make a voluntary repayment are the indexation base and clearing the loan before a serviceability assessment, not band management.

How to true up your withholding so October is not painful

For salaried employees, the simplest path is the PAYG Withholding Variation: lodge the form with your employer to ask for an extra dollar amount per pay to cover the HECS-HELP shortfall. The Variation only takes effect for the rest of the financial year, so the window to lodge is roughly July to April. Self-employed or contract workers can simply set aside the projected repayment in a separate offset or savings account and pay it at lodgement.

Related calculators

HECS-HELP Repayment Calculator — applies the ATO-published marginal schedule for the income year you pick, and keeps the old 2024-25 ladder available for amendments.
Salary Sacrifice Super Calculator — see how concessional contributions interact with HRI and how much tax you actually save after the HECS-HELP knock-on.
Second Job Tax Calculator — the second-employer "no tax-free threshold" trap that often pushes HRI into a higher band.
Negative Gearing Calculator — quantify the rental loss that gets added back to your HRI.
Division 293 Tax Calculator — the other repayment surprise for high-income borrowers, applied alongside HECS-HELP.

A worked indexation example, end-to-end

Suppose your opening HELP balance on 1 June 2026 is $32,000, of which $28,000 has been outstanding for at least 11 months and $4,000 is brand-new (Semester 1 2026). The indexation rate the ATO actually applied on 1 June 2026 was 2.8% — the lowest since 2021, after 3.2% in 2025 and 4% in 2024.

Indexation applied = 2.8% × $28,000 = $784. Balance after indexation = $28,000 + $784 + $4,000 = $32,784.

Now layer in the compulsory repayment. If your repayment income was $89,000, the repayment is ($89,000 − $69,528) × 15% = $2,920.80. The ATO posts that repayment to your account after it processes your tax return — typically October to December for most lodgers — so the order of events is: 1 June indexation first, then the compulsory repayment is credited to the post-indexation balance later in the year.

Closing balance at 31 December 2026 = $32,784 − $2,920.80 = $29,863.20. If your employer has been collecting PAYG withholding for HECS-HELP each pay, that withholding will already have been swept against the calculated $4,005 at lodgement, so you will not generally have a separate cheque to write — unless your repayment income grossed up because of fringe benefits, super or a rental loss as in Examples 2 and 3 above.

The thresholds, indexation rate and gross-up factors quoted above are the ATO-published numbers for the income years named against them. The marginal repayment system has applied since 1 July 2025. This article is general information based on the ATO and Treasury documents linked above and is not personal tax advice; talk to a registered tax agent for your specific situation.