HELP / HECS Repayment Thresholds 2025-26
From 2025-26, HELP repayments use a marginal rate system. You only pay on income above the $67,000 threshold—not your entire income. This eliminates the old "cliff effect" and significantly reduces repayments for most borrowers.
How the new system works
Under the old system (2024-25), crossing a threshold meant paying a percentage of your entire income. The new system works like income tax—you only pay on the amount above each threshold.
Example: $80,000 income
Old System (2024-25)
Flat rate on total income
- Repayment rate
- 4.5%
- Calculation
- $80,000 × 4.5%
- HELP repayment
- $3,600
New System (2025-26)
Marginal rate on excess
- Repayment rate
- 15% on excess
- Calculation
- ($80,000 - $67,000) × 15%
- HELP repayment
- $1,950
Example: $120,000 income
Old System (2024-25)
Flat rate on total income
- Repayment rate
- 7%
- Calculation
- $120,000 × 7%
- HELP repayment
- $8,400
New System (2025-26)
Marginal rate on excess
- Repayment rate
- 15% on $67k-$120k
- Calculation
- ($120,000 - $67,000) × 15%
- HELP repayment
- $7,950
The old "cliff effect" is gone
Under the old system, earning $1 more could cost you hundreds in extra repayments. Here's what used to happen:
Old: $54,400 income
Just below old threshold
- HELP repayment
- $0
Old: $54,500 income
Just above old threshold
- HELP repayment
- $545 (1% of total)
Under the new system: Earning $100 over the $67,000 threshold only costs $15 in repayments (15% of $100). No more cliffs.
The four marginal brackets and how each is calculated
The new marginal system has just 4 brackets instead of 19. Repayments are calculated only on income above each threshold. (Looking for the current year? See 2026-27 thresholds, where the minimum threshold is $69,528.)
| Repayment income | Rate | Calculation |
|---|---|---|
| $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 and above | 10% | 10% of total repayment income |
Note: At $179,286+, the system switches to 10% of total income to ensure high earners still make substantial repayments.
Why the change was made
The old flat-rate system created perverse incentives. People would avoid overtime, reject bonuses, or salary sacrifice excessively just to stay below a threshold. The marginal system:
- Removes the penalty for earning slightly more
- Makes repayments proportional to your capacity to pay
- Aligns with how income tax already works
- Particularly benefits those earning $67,000–$180,000
What you need to know
The 20% debt reduction
As of 1 June 2025, all HELP debts were reduced by 20%. This was applied before indexation. If you had a $30,000 debt, it became $24,000. Combined with the new marginal rates, your total repayments over time will be significantly lower.
Salary sacrifice is less valuable now
Under the old system, salary sacrificing to stay below a threshold saved significant money. With marginal rates, there's no cliff to avoid. Salary sacrifice may still make sense for super, but it's no longer a HELP optimisation strategy.
Your employer's withholding will change
Employers will withhold less for HELP from July 2025. If you're used to getting a tax refund partly because too much HELP was withheld, that refund may be smaller (but your regular pay will be higher).
How to check your 20% reduction was applied
The ATO applied the reduction automatically — you didn't need to apply, and processing is now complete for every study or training loan debt that existed on 1 June 2025. To check, log in to ATO online services via myGov (or the ATO app) and go to Tax → Accounts → Loan accounts. You'll see it as a transaction on your loan account, calculated on your 1 June 2025 balance before that year's indexation was applied. If it isn't showing yet, loan details transferred from other agencies can be delayed — contact the ATO to request a statement.
Frequently asked questions
What changed with HELP repayments in 2025-26?
What is the HELP repayment threshold for 2025-26?
How much will I save under the new HELP system?
Are HELP repayments taken from my pay?
How do I check if my 20% HELP reduction has been applied?
Calculate your HELP repayment
Use the HELP calculator to see your exact repayment under the new marginal system.
Calculate HELP repayment →