HECS-HELP Repayment Calculator
Calculate your exact compulsory HECS-HELP repayment under the ATO’s new 2025–26 marginal system. Only the income above $67,000 counts — finally, no more threshold cliffs.
Thank you for reading this post, don't forget to subscribe!Updated for the 2025–26 marginal system. Most salaried employees only need the top field. Open advanced inputs if you have fringe benefits, salary sacrifice, or rental losses.
The 2025–26 HECS-HELP Marginal System Explained
✓ Figures verified against the ATO’s published 2025–26 repayment rates and thresholds and the ATO’s official threshold table — last checked June 2026.
Australia’s HECS-HELP repayment system changed fundamentally on 1 July 2025. Under the old rules, crossing a repayment threshold by a single dollar applied a percentage rate to your entire repayment income — a brutal cliff effect where a $100 pay rise could trigger a $1,500 extra repayment bill. From 2025–26, the system uses a marginal approach that works exactly like income tax brackets. Each rate applies only to the income within that band, eliminating the cliff entirely.
The minimum repayment threshold also rose significantly — from $54,435 to $67,000 — meaning hundreds of thousands of graduates pay nothing in compulsory repayments until their income meaningfully exceeds that level. Combined with the one-off 20% debt reduction applied to all HELP balances on 1 June 2025, the 2025–26 changes represent the largest single improvement to HECS repayment terms since the system was introduced.
The 2025–26 Repayment Bands
The four-band marginal structure works as follows:
2025–26 ATO HECS-HELP Marginal Formula
Income ≤ $67,000 → Repayment = $0
$67,001 – $125,000 → Repayment = (income − $67,000) × 15%
$125,001 – $179,285 → Repayment = $8,700 + (income − $125,000) × 17%
$179,286 and above → Repayment = income × 10% (flat rate on total)2025–26 vs 2026–27 Thresholds
| Tax Year | No repayment threshold | 15% band | 17% band | Flat 10% from |
|---|---|---|---|---|
| 2025–26 | Up to $67,000 | $67,001–$125,000 | $125,001–$179,285 | $179,286+ |
| 2026–27 (projected) | Up to $69,528 | $69,528–$129,717 | $129,717–$186,055 | $186,055+ |
← Swipe to see all columns
The 2026–27 band boundaries beyond the confirmed $69,528 minimum threshold are a same-ratio indexed projection pending the ATO’s formal publication. The calculator labels these clearly as projected figures.
What Is Repayment Income? (It’s Not Just Your Salary)
Your HECS repayment income is almost always higher than the taxable income on your payslip. The ATO calculates repayment income by adding together all of the following:
- Taxable income — your gross salary minus any pre-tax deductions the ATO accepts (excluding salary sacrifice and fringe benefits, which are added back separately)
- Reportable fringe benefits — the grossed-up value of benefits provided by your employer (car, health insurance, etc.) that appear on your payment summary
- Reportable employer super contributions — extra super your employer makes at your direction above the standard SG rate, including all salary sacrificed super
- Total net investment loss — if you have a negatively-geared rental property, the loss is added back in full. A $20,000 rental loss that reduces your taxable income by $20,000 adds $20,000 back to your HECS repayment income
- Exempt foreign employment income — income earned overseas that is exempt from Australian tax but still counts for HECS purposes
Why the $179,286 Band Works Differently
At $179,286 and above, the formula switches from marginal bands to a flat 10% of your total repayment income. This sounds like a cliff — but the ATO designed the bands precisely so there is no jump at this boundary. Someone earning exactly $179,285 pays $8,700 + (54,285 × 17%) = $17,928. Someone earning $179,286 pays 10% × $179,286 = $17,929. The difference is $1 — mathematically continuous.
Repayment vs Indexation: Two Separate Things
Your compulsory repayment (calculated above) and the annual indexation are completely separate mechanisms. Your repayment reduces your balance. Indexation — applied each 1 June based on the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI) — adjusts the remaining balance for inflation. The most recently confirmed indexation rate was 2.8%, applied on 1 June 2026. Indexation is not interest in the traditional sense, but it does mean an unpaid balance continues to grow over time at roughly the rate of inflation.
How HECS Repayment Affects Your Borrowing Power
Your compulsory HECS repayment is treated as a recurring expense by mortgage lenders. Under APRA’s serviceability buffer rules, lenders must include your expected HECS repayment in their assessment of your living expenses and debt-servicing capacity. The shift to the marginal system lowers expected repayments for most borrowers, which can directly increase your borrowing power. It is also worth checking your take-home pay to see how the repayment affects your monthly cash flow, particularly if you are saving for a first home deposit at the same time.
What If You Have Multiple HELP Debts?
The ATO combines all of your study and training loan balances — HECS-HELP, FEE-HELP, VET Student Loans, SA-HELP, and OS-HELP — into a single aggregated HELP balance. Your compulsory repayment is calculated once based on your total repayment income and applied to that combined balance. You cannot make separate repayments to individual loan types. Voluntary additional repayments can be made via myGov at any time and are applied immediately.
HECS Repayment While Living or Working Overseas
Your HECS obligation does not pause when you live or work overseas. If your worldwide income converted to Australian dollars exceeds the repayment threshold, you must lodge a worldwide income declaration with the ATO each year and make compulsory repayments. This applies even if you pay tax in another country. Many Australians working abroad discover a large HECS debt on return because they assumed overseas income was exempt — it is not.
HECS Repayments Depend on Australian Income Rules
HELP or HECS repayment thresholds, indexation, employer withholding, and overseas obligations can change by financial year. A repayment estimate based on income is not the same as the amount withheld from each payslip, and other study loans may affect the final figure. Use the current Australian Government thresholds for the relevant year and confirm your account through the official portal before making decisions.
Frequently Asked Questions
From 2025–26, the ATO applies a rate only to the portion of your repayment income that falls within each band — the same way income tax brackets work. Income up to $67,000 attracts no compulsory repayment. The next portion up to $125,000 is charged at 15 cents per dollar. Above $125,000 up to $179,285, you pay $8,700 plus 17 cents per dollar above $125,000. From $179,286, the calculation switches to a flat 10% of your total repayment income.
Repayment income is taxable income plus several add-backs: reportable fringe benefits, reportable employer super contributions (including salary sacrifice), total net investment loss (such as a negative-geared rental property), and exempt foreign employment income. It is almost always higher than the figure on your payslip, sometimes by tens of thousands of dollars.
No. Salary sacrifice reduces your taxable income but the ATO adds the sacrificed amount back as a reportable employer super contribution when calculating repayment income. Your compulsory HECS repayment stays the same. The same applies to novated leases, which generate reportable fringe benefits that are added back.
The Australian government applied a one-off 20% reduction to all outstanding HELP balances on 1 June 2025 as part of a broader package of HECS reforms. This reduction was automatic — it was applied directly to your balance without any action required. It is separate from your ongoing compulsory repayments, which are calculated on the reduced balance going forward.
The most recently confirmed indexation rate applied to HELP balances was 2.8%, applied on 1 June 2026. This is based on the lower of the CPI and the Wage Price Index for the 12 months to March 2026. Indexation is applied to the balance remaining after any repayments made during the financial year are credited on 1 July.
Both. If you have told your employer about your HELP debt, they withhold an estimated HECS amount from each pay at the withholding rates shown in your employer’s tax tables. Your actual compulsory repayment is finalised when the ATO assesses your tax return. If your employer withheld more than required, the difference is refunded. If they withheld less, the shortfall is added to your tax payable for that year.
Yes. Living and working overseas does not pause your HECS obligation. If your worldwide income — converted to Australian dollars — exceeds the repayment threshold, you must lodge a worldwide income declaration with the ATO each year and make compulsory repayments. Failure to do so incurs penalties.
At and above $179,286 (2025–26), the calculation switches from the marginal bands to a flat 10% of your total repayment income. The ATO designed the band boundaries so there is no sudden jump at this point — the transition is mathematically continuous, with a less-than-$1 difference at the exact crossover point.
Sources & References
Calculations verified against authoritative sources: ATO — HECS-HELP Repayment Information · StudyAssist — HECS-HELP
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