If you have a Higher Education Loan Program (HELP) debt, the amount you repay each year depends on your income, not on the size of your loan balance. For the 2025-26 financial year, Australia uses a marginal repayment system: you only pay a percentage on the portion of your income above set thresholds, rather than a percentage of your total income. This guide sets out the full HECS repayment rates table for 2025-26, explains how each bracket works, and walks through worked examples so you can estimate your own repayment with confidence.
Whether you are starting your first full-time job after graduation or checking how a pay rise affects your take-home pay, understanding the marginal system matters. For a quick estimate, try the HECS calculator alongside the tables below.
The 2025-26 HECS Repayment Rates Table
The table below shows the repayment rates that apply to repayment income for 2025-26 under the Australian Taxation Office (ATO) marginal HELP system. Repayment income is not quite the same as your salary: it is your taxable income plus net investment losses, reportable fringe benefits, reportable super contributions, and exempt foreign employment income. This broader definition means some people repay more than they expect if they only look at their taxable income.
| Repayment income | Repayment rate | How the repayment is calculated |
|---|---|---|
| $0 to $67,000 | Nil | No compulsory repayment |
| $67,001 to $125,000 | 15 cents for each $1 over $67,000 | 15% of the amount above $67,000 |
| $125,001 to $179,285 | $8,700 plus 17 cents for each $1 over $125,000 | $8,700 plus 17% of the amount above $125,000 |
| $179,286 and above | 10% of total repayment income | 10% of your entire repayment income |
The key threshold to remember is $67,000. If your repayment income is at or below this level, you make no compulsory HELP repayment for the year. Once you earn above it, you pay 15 cents in the dollar only on the slice of income above $67,000, until you reach $125,000. That design is what makes the system marginal: the rate applies to each extra dollar in a bracket, not to everything you earn.
How the Marginal System Works in Practice
Under a marginal system, your income is divided into slices, and each slice attracts its own repayment rate. This removes the cliff edges of the old system, where one extra dollar could push a higher rate onto your whole income. A pay rise always leaves you with more after repayments, because only the income in the higher bracket attracts the higher rate.
Consider someone earning $70,000 in repayment income. Only $3,000 sits above the $67,000 threshold, so the repayment is 15 cents multiplied by $3,000, which equals $450. The first $67,000 attracts no repayment at all. Similarly, someone earning $80,000 pays 15 cents on $13,000, giving a repayment of $1,950. The calculation stays straightforward until income passes $125,000, at which point the second marginal rate comes into play.
The $125,000 Step-Up to 17 Cents
Once repayment income passes $125,000, the repayment reaches $8,700 (15 cents on the $58,000 slice between $67,000 and $125,000). Above $125,000, each additional dollar attracts 17 cents until income reaches $179,285. At $130,000, for example, the repayment is $8,700 plus 17 cents on $5,000, totalling $9,550.
The 10% Cap at $179,286 and Above
At $179,286, the system switches to a flat 10% of total repayment income. At $200,000, the repayment is therefore $20,000. The switch point is set so the marginal calculation and the 10% calculation meet smoothly, with no sudden jump.
Worked Examples: What You Actually Repay
The table below applies the 2025-26 rates to a range of incomes. Use it to find the figure closest to your own repayment income, or use it to sense-check an estimate from a calculator.
| Repayment income | Calculation | Annual compulsory repayment |
|---|---|---|
| $70,000 | 15c × $3,000 over $67,000 | $450 |
| $80,000 | 15c × $13,000 over $67,000 | $1,950 |
| $100,000 | 15c × $33,000 over $67,000 | $4,950 |
| $130,000 | $8,700 + 17c × $5,000 over $125,000 | $9,550 |
| $150,000 | $8,700 + 17c × $25,000 over $125,000 | $12,950 |
| $200,000 | 10% of total repayment income | $20,000 |
What Counts as Repayment Income
Many graduates are surprised to learn that repayment income is broader than taxable income. The ATO defines repayment income as your taxable income plus:
- net investment losses, such as a negatively geared rental property loss;
- reportable fringe benefits, for example salary-packaged benefits reported on your payment summary;
- reportable super contributions, including salary-sacrificed super contributions and personal deductible contributions; and
- exempt foreign employment income.
These add-backs matter: salary sacrificing into super reduces taxable income but does not reduce repayment income by the same amount, and a rental loss that lowers taxable income is added back for HELP purposes. If you salary sacrifice, check whether your repayment will be higher than a simple salary-based estimate suggests.
Employer Withholding Versus Your Final Assessment
Most employees do not pay their HELP debt in a lump sum during the year. Instead, your employer withholds extra tax from each pay run if you have told them you have a HELP debt, usually by ticking the relevant box on your Tax File Number declaration. This withholding is an estimate: it is collected through the pay-as-you-go (PAYG) system and credited against your final tax bill when you lodge your return.
Your actual compulsory repayment is only finalised when the ATO assesses your tax return. If your employer withheld too much, the excess comes back as part of your tax refund; if too little was withheld, perhaps because your income rose during the year, you may owe a balance when you lodge. Checking your year-to-date withholding midway through the year is sensible, especially after a pay rise or job change.
Indexation: How Your Debt Balance Changes
Separate from your annual repayment is indexation, which adjusts your outstanding HELP debt to keep pace with the cost of living. Indexation is applied on 1 June each year to the portion of your debt that is more than 11 months old. The rate used is the lower of the Consumer Price Index (CPI) and the Wage Price Index (WPI). For recent years, the relevant figures are 3.2% on 1 June 2025 and 2.8% on 1 June 2026.
Indexation is not interest in the commercial sense, but it does increase the balance you owe if you do not repay it. A voluntary repayment made before 1 June can reduce the amount that gets indexed, provided it is processed in time. A one-off 20% reduction was also applied to HELP balances as at 1 June 2025, which is why your balance may look lower than expected.
Voluntary Repayments: What to Know
You can make voluntary repayments towards your HELP debt at any time through ATO online services, and there is no discount for doing so. In the past, voluntary repayments attracted a bonus, but that no longer applies: a voluntary payment reduces your balance dollar for dollar, nothing more. Whether a voluntary repayment is worthwhile depends on your circumstances. Clearing the debt sooner removes the annual compulsory repayment from your future cash flow and stops indexation on the amount repaid, but the money could alternatively go towards an emergency fund, a home deposit, or higher-interest debt. There is no universally right answer, so compare the benefit of being debt-free sooner against your other goals.
How the New System Compares With the Old One
Before 2025-26, HELP repayments used a different design: once your income crossed a threshold, the applicable rate was applied to your total income, not just the portion above the threshold. That created sharp jumps. Earning a small amount extra could increase your repayment by far more than the extra income itself, because the higher rate suddenly applied to everything you earned. The old system also had many more brackets with small steps, which made it harder to predict the effect of a pay rise.
The marginal system is simpler and fairer in that respect: only three effective zones, and no outcome where a pay rise leaves you worse off. The trade-off is that high earners can face a larger dollar repayment, because 10% of total income is a substantial amount.
Frequently Asked Questions
Do I have to repay my HECS debt if I earn under $67,000?
No. If your repayment income for 2025-26 is $67,000 or less, your compulsory repayment is nil. You can still make voluntary repayments if you wish, but there is no compulsory amount and no discount for doing so.
How is my repayment calculated if I earn $90,000?
At $90,000, your repayment is 15 cents on the $23,000 above $67,000, which equals $3,450. The first $67,000 attracts no repayment. You can verify this with the formula for the $67,001 to $125,000 bracket, or with the HECS calculator.
Does salary sacrificing into super reduce my HECS repayment?
Not in the way many people expect. Reportable super contributions are added back when calculating repayment income, so salary-sacrificed super does not lower your repayment income by the full amount sacrificed. It may still be worthwhile for retirement savings and tax reasons, but do not assume it will reduce your HELP repayment dollar for dollar.
Why is my employer withholding more than my final repayment?
Employer withholding is an estimate based on your pay during the year, and it may not match your final assessed repayment if your income changed, you held multiple jobs, or you had other income. Any excess withholding is refunded when your tax return is assessed, and any shortfall becomes an amount payable. The final figure is set by the ATO assessment, not by the withholding alone.
What happens to my debt if I go overseas or stop working?
Your HELP debt does not disappear if you leave Australia or stop earning. Indexation continues to apply to balances over 11 months old, and if you have worldwide income above the threshold, you may still have a repayment obligation. The ATO has specific reporting requirements for overseas debtors, so check its guidance before you depart rather than assuming no repayment applies.
Should I make voluntary repayments?
There is no discount for voluntary repayments, so the decision is personal. Voluntary payments reduce your balance and stop future indexation on the amount repaid, and they can clear the debt sooner. Weigh that against other priorities such as emergency savings or higher-interest debts, and consider timing a payment before 1 June if you want to reduce the balance subject to indexation.
Conclusion
The 2025-26 HECS repayment rates are simpler than they first appear: nothing below $67,000, 15 cents in the dollar up to $125,000, 17 cents up to $179,285, and 10% of total repayment income above that. Because the system is marginal, a pay rise never leaves you worse off, and the worked examples in this guide, from $450 at $70,000 to $20,000 at $200,000, give you a reliable starting point for your own estimate. Remember that repayment income includes add-backs such as reportable super contributions and fringe benefits, that employer withholding is only an estimate until your return is assessed, and that indexation of 2.8% on 1 June 2026 will apply to balances over 11 months old.
To get a personalised estimate, run your figures through the HECS calculator and compare the result with the tables above. If your situation involves multiple jobs, foreign income, or significant salary packaging, a registered tax agent can confirm your repayment income and help you plan for tax time with no surprises.