2025-26 HELP Repayment Rates Explained

General information only. Speak with a registered tax agent for advice.

HELP (formerly HECS) is repaid through the tax system once your income crosses a threshold. Understanding how repayments are calculated — and what counts as “repayment income” — helps you plan effectively and avoid surprises at tax time.

How HELP repayments work

From 1 July 2025, HELP repayments use a marginal system. You pay a percentage of the income above each threshold — not a flat percentage of your entire repayment income. Only the slice of income within each band is charged at that band’s rate, exactly like income tax brackets.

This is a fundamental change from the old system. Previously, a single flat rate (ranging from 1% to 10%) applied to your whole repayment income the moment you crossed the relevant threshold. That created a “cliff”: crossing from $54,434 to $54,436 could trigger a 1% liability on the full amount, not just the extra $2 — and each higher band applied its rate retrospectively to every dollar you earned. Under the marginal system there is no cliff up to $179,286: a small pay rise only ever increases the repayment on the extra income, so repayments rise smoothly and predictably.

2025-26 repayment thresholds

The first repayment threshold for 2025-26 is $67,000 — below this, no compulsory repayment applies. Above it, the marginal rates are:

The $8,700 base in the third band is simply 15% of the full $58,000 between $67,000 and $125,000. At $179,286 and above, the marginal accrual converges to 10% of total income and is capped there, so the top band is a flat 10% of your entire repayment income. Thresholds are set annually in the tax regulations and indexed based on wage growth.

What counts as repayment income?

The ATO uses “repayment income” — a broader measure than taxable income alone. It includes:

• Taxable income (salary, wages, investment income, business income, capital gains)
• Reportable fringe benefits (the grossed-up value of benefits reported on your payment summary)
• Total net investment losses (any net losses from rental property or shares added back in)
• Reportable employer super contributions (salary-sacrificed super above the standard rate)

The effect is that you cannot reduce your HELP repayment obligation simply by structuring income into negatively geared investments or salary-sacrificed super contributions — those amounts are added back when calculating repayment income.

Worked example: income of $80,000

Consider someone with a repayment income of $80,000 (no investment losses or reportable super):

• Falls in the $67,001–$125,000 band, charged at 15% on the amount above $67,000
• Only the $13,000 above the threshold counts: $80,000 − $67,000 = $13,000
• Repayment: 15% × $13,000 = $1,950
• This is withheld from wages during the year if your employer knows about the HELP debt (you tick the box on your tax file number declaration)
• If withholding is set correctly, there is no surprise at lodgement

If this person also had $5,000 of reportable employer super contributions, their repayment income becomes $85,000 (still in the 15% band):

• Only the amount above $67,000 counts: $85,000 − $67,000 = $18,000
• Repayment: 15% × $18,000 = $2,700

The additional super contributions added $750 to the HELP repayment — worth factoring into salary sacrifice decisions.

Higher-income examples

Repayment income of $140,000 (in the $125,001–$179,285 band):

• Base amount for the band: $8,700 (15% of the $58,000 between $67,000 and $125,000)
• Plus 17% of the income above $125,000: 17% × ($140,000 − $125,000) = 17% × $15,000 = $2,550
• Repayment: $8,700 + $2,550 = $11,250

Repayment income of $200,000 (in the top band):

• At $179,286 and above, a flat 10% of total repayment income applies
• Repayment: 10% × $200,000 = $20,000

Voluntary repayments

You can make voluntary repayments to reduce your HELP balance at any time via ATO online services in myGov. There is no minimum amount. Note that the 5% voluntary repayment bonus, which previously applied, was abolished from 1 January 2017 (2016-17 Budget measure) — there is no longer a financial incentive to pay ahead beyond reducing future indexation exposure.

HELP debt is indexed on 1 June each year using the lower of the Consumer Price Index (CPI) or Wage Price Index (WPI). In years of high inflation, this can meaningfully increase the debt balance, which is a reason some borrowers choose to make voluntary repayments.

Overseas obligations

If you leave Australia for 183 or more days in a year, your worldwide income becomes subject to HELP repayment obligations. You are required to notify the ATO and submit an overseas levy calculation. Failing to do this can result in interest charges. The overseas repayment thresholds use a “worldwide income” measure converted to Australian dollars.

Managing your HELP repayment

The marginal system removes the old cliff — a small pay rise no longer triggers a jump in repayment calculated on your whole income. A few things still help you manage the cash flow impact:

1. Salary sacrifice into super: Salary sacrificed super does not reduce your HELP repayment income (it is added back), so this is less effective than it might appear. However, it can still reduce income tax. Confirm the net position using the Income Tax Calculator.
2. Defer discretionary income: If you have flexibility over when a bonus or freelance payment is received, timing it into a lower-income year can reduce the marginal rate applied to it.
3. Monitor multiple income sources: If you have a second job or investment income, make sure enough tax is withheld across all payers. Underpayment at lodgement can be a shock if repayment income was underestimated.
4. Check your balance in myGov: Knowing your remaining HELP balance helps you decide whether a voluntary lump sum payment is worth considering before the June 1 indexation date.

Key takeaways

• HELP repayments are marginal from 2025-26: you pay only on the income above each threshold, not on your whole income.
• The first repayment threshold is $67,000 — below it, no compulsory repayment applies.
• Rates rise from 15% (on income above $67,000) to 17% (on income above $125,000), then cap at a flat 10% of total income from $179,286.
• Repayment income is broader than taxable income — fringe benefits, investment losses, and reportable super are all added back.
• Voluntary repayments have no bonus but can reduce future indexation exposure.
• Overseas residents with HELP debt have ongoing obligations based on worldwide income.

Related tools: Income Tax Calculator and the HELP repayment scenario.