HECS/HELP Repayment Thresholds Explained (2026-27)

$69,528. Below this repayment income, you owe nothing on your HECS-HELP or other Study and Training Support Loan debt for the 2026-27 financial year. This threshold is indexed each year, so it moves slightly year to year; always check the current ATO figure rather than assuming last year's number still applies.

Since 1 July 2025, you only repay on the slice of your repayment income above each threshold, the same logic as income tax brackets. For 2026-27: nothing below $69,528; 15c per dollar from $69,528 to $129,717; $9,028 flat plus 17c per dollar from $129,717 to $186,050; and a flat 10% of your total repayment income above $186,050. This replaced the old system, where your entire repayment income was taxed at one flat percentage the moment you crossed a threshold, creating a cliff effect that could cost hundreds of dollars for earning $1 extra.

The old flat-percentage system meant a single dollar of extra income, a small bonus, or a pay rise that nudged you over a threshold could increase your compulsory repayment by hundreds of dollars in one step, since the higher rate applied to your entire repayment income, not just the amount over the threshold. The marginal system removes that cliff: crossing a threshold by a small amount now only costs you the marginal rate on that small amount, consistent with how income tax already works.

Repayment income starts from your taxable income and adds back total net investment losses, reportable fringe benefits, exempt foreign employment income, and reportable super contributions above the compulsory Super Guarantee (like extra salary sacrifice). For most standard PAYG employees without those extras, repayment income and gross salary are effectively the same figure.

Since a 2024 reform backdated to 1 June 2023, your HELP balance is indexed each 1 June by whichever is lower: CPI (Consumer Price Index) or the Wage Price Index (WPI). The ATO calculates this after December CPI and WPI figures are released and publishes the confirmed rate around the third week of the following May. The most recent confirmed rate, applied 1 June 2026, was 2.8%, the lowest since 2021.

Yes, this is a real risk at lower repayment incomes. If your compulsory repayment for the year is smaller than the amount your balance grows by from indexation, your total debt increases even though you're making repayments. It's most likely to happen just above the $69,528 threshold on a large debt balance; voluntary repayments, or waiting for your income to rise into a higher repayment band, both help outpace indexation.

Your employer withholds an estimate based on the HELP repayment rate you declare on your Tax File Number declaration and your regular pay, but this is reconciled against your actual repayment income at tax time when you lodge your return. If your income varies through the year (bonuses, a mid-year pay rise, a second job), the amount withheld through the year may not exactly match your final compulsory repayment, and the difference is settled as part of your tax assessment.