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.
2025-26 HELP repayment thresholds
The new marginal system has just 4 brackets instead of 19. Repayments are calculated only on income above each threshold.
| 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).
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?
Calculate your HELP repayment
Use the HELP calculator to see your exact repayment under the new marginal system.
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