If you have a HECS-HELP debt, the way your compulsory repayment is worked out changed from the 2025–26 income year. Under the old system, once you passed the threshold a single percentage applied to your whole income. Now you repay only on the part of your income above the threshold, much like income tax. For most people that means lower repayments, and no more sudden jump when a pay rise tips you into the next bracket.
The 2026–27 thresholds and rates
| Repayment income | Compulsory repayment |
|---|---|
| $0 to $69,528 | Nil |
| $69,529 to $129,717 | 15c for each $1 over $69,528 |
| $129,718 to $186,050 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of your total repayment income |
The same rates apply to all study and training loans, including VET Student Loans and Australian Apprenticeship Support Loans. In 2025–26 the first threshold was $67,000.
What counts as repayment income
Repayment income is more than your taxable income. The ATO adds reportable fringe benefits, net investment losses (including rental losses), reportable super contributions such as salary sacrifice, and exempt foreign employment income. So negative gearing or salary sacrificing into super doesn't reduce your HELP repayment, even though it lowers your tax.
Old system versus new
Compulsory repayments on the same repayment income under the 2024–25 rules and the 2026–27 rules:
| Repayment income | 2024–25 | 2026–27 |
|---|---|---|
| $60,000 | $600 | $0 |
| $70,000 | $1,750 | $71 |
| $80,000 | $3,200 | $1,571 |
| $100,000 | $5,500 | $4,571 |
| $130,000 | $10,400 | $9,076 |
| $180,000 | $18,000 | $17,576 |
| $200,000 | $20,000 | $20,000 |
The biggest difference is for people just above the threshold. Someone on $70,000 repaid $1,750 under the old rules but only $71 now. At the top end the two systems converge: above $186,050 you still repay 10% of everything.
Lower repayments don't mean a smaller debt
Your compulsory repayment is only the minimum. A lower repayment frees up cash each pay, but it means the debt takes longer to clear, and the balance is indexed every 1 June. Indexation is now capped at the lower of CPI and wage growth, which helps, but with inflation above 4% it still adds to what you owe. Voluntary repayments are an option if you want to clear it faster, though they are rarely the best use of spare cash if you have a mortgage or other debts at a higher rate.
The 20% debt cut
Separately from the new repayment system, the government legislated a one-off 20% reduction to student loan balances in 2025. It was applied to debts as they stood on 1 June 2025, before that year's indexation, and was credited automatically. If your balance looks lower than you expected, that is why. It didn't change how compulsory repayments are calculated.
How it shows up in your pay
Your employer withholds an estimate of your repayment from each pay if you tell them you have a study loan. The actual amount is worked out when you lodge your tax return, so you may get some back or owe a little more.
To see your take-home pay with HELP repayments, tax, super and the Medicare levy together, use the pay calculator and tick the study loan option.