HECS Repayment Threshold 2025-26: Official Rates & Brackets

For the 2025-26 financial year, the minimum HECS repayment income threshold is $67,000. At or below that threshold, the income-based formula is nil. From 1 July 2025, a new marginal bracket system replaced the old flat-rate method: the lower bands apply to dollars above their thresholds, while the top band is 10% of total repayment income. Final compulsory liability is also subject to the statutory repayable-debt cap.

Scope: The figures below are income-formula amounts, not a determination that you owe that amount. Under section 154-1(2) of the Higher Education Support Act 2003, a person is not liable for the domestic amount if, under section 8 of the Medicare Levy Act 1986, no Medicare levy is payable on their taxable income for that year or the levy is reduced. A separate overseas-debtor levy may apply where a person is a foreign resident during the income year, has an accumulated HELP debt on 1 June before assessment and assessed worldwide income exceeds the minimum threshold. That income includes repayment income and foreign-sourced income. This guide and its calculator do not calculate that separate levy.

This is a historical-year guide. The 2025-26 income year ended on 30 June 2026, so nothing below is your current-year position — it stays published for anyone amending or catching up on a 2025-26 return. The current year is 2026-27, and the ATO's brackets for it are:

The $9,028.35 base is the 15% amount accumulated up to $129,717 under section 154-20(2) of the Higher Education Support Act 2003. The ATO summary table displays it as $9,028; this site applies the statutory formula at cents precision. Source for the published thresholds: ATO — study and training support loans rates and repayment thresholds, read 13 August 2026. Check the HELP Repayment Threshold tool for whichever year applies to you.

2025-26 HECS-HELP Repayment Threshold and Rates (Official ATO Table)

These official brackets came into effect on 1 July 2025.

Official Thresholds and Marginal Repayment Rates for 2025-26

Only the income above $67,000 is charged in the first bracket. The top bracket instead uses 10% of total repayment income. These are income-formula amounts; final compulsory liability is the least of the formula, 10% of repayment income and repayable debt. Repayment income also isn't always the same as taxable income — more on that below.

When You Start Paying HECS in 2025-26

A non-nil income-based formula begins above $67,000. At exactly $67,000, that formula is nil. At $67,001, it is 15 cents on the dollar above the threshold. The final compulsory amount is subject to repayable debt.

What "Marginal" Actually Means for HECS

Think of it exactly like tax brackets. You only pay the specified rate on the portion of income that falls within each bracket — not on everything you earn. There's one exception though: if your RI hits $179,286 or more, you pay a flat 10% of your total RI. That's the top bracket and it works differently.

Quick Examples

1. RI = $67,000: Repayment is $0.
2. RI = $70,000: ($70,000 − $67,000) × $0.15 = $450.
3. RI = $127,064: $8,700 + [($127,064 − $125,000) × $0.17] = $9,051 under the income formula, if repayable debt is at least that amount.

Rather than working yours by hand, put it in. Watch the share of your income against the band rate — at $85,000 the band says 15 cents, but only the income above $67,000 is charged, so the real share is under 4%.

How to Check Your HECS Repayment Details

1. Find Your Repayment Income (RI) Inputs

Before you can work anything out, you need to gather these numbers from your income statement and tax records:

• Taxable income
• Reportable fringe benefits amount
• Total net investment loss (including rental losses)
• Reportable super contributions
• Exempt foreign employment income

2. Match Your RI to the 2025-26 Bracket Table

The table gives an income-based formula amount, not a final amount you necessarily owe. For a domestic debtor, the assessed compulsory amount is subject to the statutory limits and the Medicare-levy exception described above. This guide does not determine an individual liability or calculate the separate overseas-debtor levy.

3. Confirm Your Study Loan Status with the ATO (myGov)

Check your official loan balance directly with the ATO — don't guess.

1. Sign in to your myGov account.
2. Open the Australian Taxation Office service.
3. Select "Tax," then "Loan accounts."
4. Check your HELP/HECS balance, indexation adjustments, credits and any recent activity.

Repayment Income (RI) Explained: What Counts in 2025-26

Here's the thing most people get wrong: your RI is often higher than the salary that hits your bank account. The ATO adds back several amounts that may have reduced your taxable income, and that can push you over a threshold you thought you were safely under.

Repayment Income vs. Taxable Income

Your taxable income is the starting point. To get your repayment income (RI), the ATO adds back specific items on top. One notable exclusion: any assessable First Home Super Saver (FHSS) released amounts are taken out of your taxable income for this calculation.

What the ATO Includes in Repayment Income (RI)

Your RI is the sum of:

• Taxable income
• Reportable fringe benefits (as shown on your income statement) — for example, a company car provided by your employer for personal use
• Total net investment loss (including net rental losses) — if a rental property made a paper loss that reduced your taxable income, the ATO adds that loss back to figure out your RI
• Reportable super contributions — any extra pre-tax contributions you make via salary sacrifice are added back
• Exempt foreign employment income

So if you negative gear a property and salary sacrifice into super, your RI could be meaningfully higher than what you actually take home. Worth knowing before you assume you're under the threshold. Our HELP/HECS Calculator can project your repayment timeline based on your income and current balance — including how long until it's gone.

Worked Repayment Examples

Here's how the maths plays out for different income levels using the new marginal system.

Sample Income-Formula Amounts Using the 2025-26 Marginal System

*Formula amounts are rounded to the nearest dollar and assume repayable debt is at least the amount shown. Final compulsory liability is the least of the formula, 10% of repayment income and repayable debt.

Detailed Calculation for RI of $150,000 for 2025-26

An individual with a repayment income of $150,000 falls into the $125,001 – $179,285 bracket. Here's how it works step by step:

1. Identify the base amount: This bracket starts with a base repayment of $8,700. That's the total repayment for income up to $125,000 — calculated as ($125,000 - $67,000) × 0.15 = $8,700.
2. Calculate the income above the lower limit: $150,000 (RI) - $125,000 (lower limit) = $25,000.
3. Apply the marginal rate: $25,000 × 0.17 = $4,250.
4. Add the base amount and the marginal portion: $8,700 + $4,250 = $12,950.

So the income-based formula amount for a $150,000 repayment income in 2025-26 is $12,950, provided repayable debt is at least that amount. Final compulsory liability is the least of that formula amount, 10% of repayment income and repayable debt.

Employer Withholding vs. What You Actually Repay

What your employer withholds throughout the year isn't always your final bill — it's an estimate. The ATO settles the real number at tax time.

Why Your Employer Withholds During the Year

When you start a new job, you complete a TFN declaration and tick whether you have a study loan. If you say yes, your employer withholds extra tax to cover your estimated compulsory repayment. But they're working off projected income, not your final RI — so there's often a difference.

What Happens if You're Under the Threshold But Withholding Occurred

If your employer withheld HECS amounts during the year but your final RI came in at $67,000 or less, the ATO reconciles the withholding when you lodge your return. Any excess can be applied against other tax or Australian Government debts before any refund is issued. Your employer cannot refund this money directly.

Stopping HECS Withholding After Repayment

Once your HECS-HELP loan is fully repaid, you need to tell your employer to stop the extra withholding. Here's what to do:

1. Confirm loan balance: Check your official loan account in myGov and make sure your HELP debt balance is $0.
2. Complete a withholding declaration: Give your employer a completed Withholding declaration (NAT 3093) after the loan is repaid in full.
3. Update status: On that declaration, indicate that you no longer have a HECS-HELP, VET FEE-HELP or TSL debt.
4. Submit to employer: Hand the completed declaration to your employer. They'll adjust your withholding from that point forward. If a HELP debt remains, loan-component withholding generally continues. ATO PAYG guidance provides an exception where a payee has lodged a Medicare levy variation declaration (NAT 0929) claiming the relevant reduction or exemption for a spouse or dependants and low family income. Check the current ATO criteria before relying on that exception; payroll withholding is not the final annual assessment.

Indexation and Your HECS Balance

Your loan balance doesn't sit still between repayments. Indexation is applied once a year and it can undo progress if you're not watching it.

When Indexation Applies

Indexation happens on 1 June each year. It adjusts your debt to maintain its real value over time. Generally, it only applies to debt that's been outstanding for more than 11 months.

How Indexation Is Set

From 1 June 2023, the indexation rate is the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). This change was designed to stop debt from growing faster than wages during high inflation periods — a real problem in 2022 and 2023. This rule concerns indexation of the debt balance; HELP repayment thresholds are indexed separately under section 154-25 of the Act using average weekly earnings for all employees.

The 20% Debt Reduction Applied on 1 June 2025

A 20% debt reduction was applied to loan balances before indexation on 1 June 2025. This shows up as a credit or adjustment in your ATO loan account on myGov.

Conditions for the 20% reduction:

• The reduction applied automatically only to outstanding eligible student loan balances that existed on 1 June 2025, before indexation (3.2%) was applied.
• If your balance was zero on 1 June 2025, you weren't eligible.

How the reduction and indexation were applied:

1. Calculate outstanding balance: The outstanding balance as at 1 June 2025 was determined.
2. Apply 20% reduction: The 20% reduction was applied to that balance.
3. Apply indexation: Indexation (3.2% for 2025) was then applied to the post-reduction balance.
4. Visibility in myGov: The reduction was recorded as a credit on individual loan accounts, and the indexation was shown as an adjusted amount — visible in your linked myGov ATO account and via the ATO mobile app.
5. Processing timeline: Updates began mid-November 2025, with most accounts updated by mid-December 2025. Additional cases were completed by early 2026.

2025-26 Changes Compared With 2024-25

The 2025-26 formula changed how the income-based amount is calculated. The lower formula bands apply marginal rates and the top formula band uses total repayment income; the debt cap separately limits final compulsory liability.

Key Changes at a Glance

1. Lifted the minimum repayment threshold from $54,435 to $67,000.
2. Introduced lower marginal formula bands alongside a top formula band based on total repayment income.
3. Changed the income-based amounts for people near the threshold compared with the previous flat-rate method.

Comparison Example: Old vs. New Repayment

Under the 2025-26 income formula, someone with repayment income of $70,000 has an income-based amount of $450 before the repayable-debt cap. Under the old 2024-25 system, the same income would have produced a higher income-based amount — calculated as a flat percentage of total income, not just the amount above the threshold. Actual compulsory liability is also limited by repayable debt.

That's a meaningful difference for people hovering just above the minimum.

Voluntary Repayments and Compulsory Repayments

Voluntary repayments and compulsory repayments are treated differently in the HELP system.

When Voluntary Repayments Can Be Made

Voluntary repayments can be made to the ATO through myGov, including by BPAY or credit card. There is no minimum amount or penalty for an additional repayment.

How Voluntary Repayments Interact With Compulsory Repayments

Paying voluntarily in reduction of the debt reduces the loan balance and, under section 154-15 of the Higher Education Support Act 2003, the person's repayable debt. Under section 154-20(1), the compulsory repayment is the least of the applicable income formula, 10% of repayment income and the person's repayable debt. A voluntary payment can therefore reduce the debt cap and the final compulsory amount where repayable debt is lower.

Only the part of the balance that has been unpaid for more than 11 months is subject to that year's indexation.

Wrapping Up

Want to see your exact repayment rate for any income level? The HELP Repayment Threshold tool has the current bracket at a glance, whichever year you're checking — including the current 2026-27 threshold of $69,528.

The published threshold and changed income formula differ from the previous flat-rate method. Repayment income can include add-backs beyond salary. The ATO account shows the loan balance; after the debt is cleared, update your employer's withholding declaration so further payroll deductions can stop.