HELP/HECS marginal rates 2025-26

This page is the detailed method explainer. It focuses on how the 2025-26 marginal repayment system works, how it differs from the old flat-rate approach, and what the old-vs-new repayment gap looks like at common incomes.

If you searched for the basic trigger point, open the HELP repayment thresholds 2025-26 page first. Use this page when you want the method detail and the old-vs-new comparison table.

2025-26 Marginal Rate System

The new system works like income tax brackets. Each rate only applies to income within that band:

Income Range	Rate	How It Works
$0 – $67,000	Nil	No repayment required
$67,001 – $125,000	15%	15c for each $1 over $67,000
$125,001 – $179,285	17%	$8,700 + 17c for each $1 over $125,000
$179,286 +	10%	10% of total repayment income

2024-25 Old System (for comparison)

The previous system applied a flat percentage to your entire repayment income once you exceeded a threshold:

Income Range	Rate
$0 – $54,434	Nil
$54,435 – $62,850	1.0%
$62,851 – $66,620	2.0%
$66,621 – $70,618	2.5%
$70,619 – $74,855	3.0%
$74,856 – $79,346	3.5%
$79,347 – $84,107	4.0%
$84,108 – $89,154	4.5%
$89,155 – $94,503	5.0%
$94,504 – $100,174	5.5%
$100,175 – $106,185	6.0%
$106,186 – $112,556	6.5%
$112,557 – $119,309	7.0%
$119,310 – $126,467	7.5%
$126,468 – $134,056	8.0%
$134,057 – $142,100	8.5%
$142,101 – $150,626	9.0%
$150,627 – $159,663	9.5%
$159,664 +	10.0%

Old vs New System Comparison

See how much less you'll repay under the new marginal system:

Income	Old System	New System	Annual Saving
$55,000	$550	$0	$550
$60,000	$600	$0	$600
$67,500	$1,688	$75	$1,613
$75,000	$2,625	$1,200	$1,425
$85,000	$3,825	$2,700	$1,125
$100,000	$5,500	$4,950	$550
$120,000	$9,000	$7,950	$1,050
$150,000	$13,500	$12,950	$550
$180,000	$18,000	$18,000	—
$200,000	$20,000	$20,000	—

Frequently asked questions

How are HELP repayments calculated in 2025-26?

From 2025-26, HELP uses a marginal rate system. You pay nothing on income below $67,000, 15% on income between $67,001 and $125,000, then $8,700 plus 17% on income above $125,000. At $179,286 and above, a flat 10% of total income applies.

What changed from the old HELP system?

The old system (2024-25 and earlier) applied a flat percentage to your entire repayment income once you exceeded a threshold. The new marginal system only taxes income above each threshold, similar to income tax brackets. This means smaller jumps in repayment amounts as your income increases.

What is the HELP repayment threshold for 2025-26?

The minimum repayment threshold is $67,000 for 2025-26. If your repayment income is below this amount, you make no compulsory repayment. This is higher than the 2024-25 threshold of $54,435.

Is HELP/HECS interest-free?

HELP debts do not accrue interest, but they are indexed annually on 1 June by the lower of CPI or the Wage Price Index. This means the balance increases each year with inflation, but it is not traditional interest.

Can I make voluntary HELP repayments?

Yes. You can make voluntary repayments at any time through the ATO. Voluntary repayments reduce your debt balance directly. Since the removal of the voluntary repayment bonus, there is no financial incentive to pay early — but it does reduce future indexation.

Does my HELP repayment come out of my pay?

Yes, if you've notified your employer of your HELP debt (or ticked the relevant box on your TFN declaration). Your employer will withhold additional PAYG amounts to cover your estimated HELP repayment, so you shouldn't face a large bill at tax time.

Calculate your HELP repayment

Use our HELP/HECS Repayment Calculator to see your exact repayment amount, compare old vs new systems, and estimate years to pay off your debt.

Tax Accuracy & Sources

Reviewed: March 2026 · Tax year: 2025-26

This page compares the 2025-26 HELP marginal repayment method against the 2024-25 flat-rate method. It does not calculate actual debt balances or indexation.