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

HELP repayments are calculated as a flat percentage of your entire repayment income, not just the slice above the threshold. This is sometimes called the “cliff” effect: crossing from $54,434 to $54,436 triggers a 1% liability on the full amount, not just the extra $2.

From 1 June 2025, the government moved to a marginal-style system for calculating repayment obligations. Rather than a small number of wide bands where every dollar in a band is taxed at the same flat rate, there are now more graduated bands — meaning small income increases produce smaller repayment jumps. The intent is to soften the cliff effect that previously caused large cash flow shocks when income crossed a threshold.

2025-26 repayment thresholds

These thresholds are indexed to wage growth each year. The following rates apply to 2025-26:

Repayment income	Rate
$0 – $54,435	0%
$54,436 – $62,850	1%
$62,851 – $66,620	2%
$66,621 – $70,618	2.5%
$70,619 – $74,855	3%
$74,856 – $79,346	3.5%
$79,347 – $84,107	4%
$84,108 – $89,154	4.5%
$89,155 – $94,503	5%
$94,504 – $100,174	5.5%
$100,175 – $106,185	6%
$106,186 – $112,556	6.5%
$112,557 – $119,309	7%
$119,310 – $126,467	7.5%
$126,468 – $134,056	8%
$134,057 – $142,100	8.5%
$142,101 – $150,627	9%
$150,628 – $159,663	9.5%
$159,664+	10%

Thresholds are set annually in the tax regulations and indexed based on AWOTE (Average Weekly Ordinary Time Earnings) movements.

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 $79,347–$84,107 band at 4%
• Repayment: $80,000 × 4% = $3,200
• 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, falling in the $84,108–$89,154 band at 4.5%:

• Repayment: $85,000 × 4.5% = $3,825

The additional super contributions added $625 to the HELP repayment — worth factoring into salary sacrifice decisions.

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 2020 — 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 the repayment cliff

Even with the more graduated 2025-26 system, crossing a threshold band still has a cash flow effect. Strategies to consider:

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 the lower-income year can reduce the annual repayment.
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 rates are flat percentages on your entire repayment income, applied to whichever band you fall into.
• Repayment income is broader than taxable income — fringe benefits, investment losses, and reportable super are all added back.
• The move to a more marginal system from June 2025 softens the cliff effect, but threshold crossings still affect cash flow.
• 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.