The changes to the HELP (formerly HECS) repayment thresholds and rates are quite a bit different this year! On the whole, most employees will see a saving compared to their previous repayments. However, it’s worth explaining how the new structure works.
How were payments previously calculated?
Prior to 1 July 2025, Australians with a HELP debt were required to repay an annual amount, which was calculated as a percentage of their total ‘repayment income’. The ATO explains that ‘repayment income’ is taxable income, plus total reportable fringe benefits, reportable superannuation contributions, total net investment loss and exempt foreign employment income.
To work out the repayment amount, a percentage was simply applied to the total repayment income. For example, for someone with a repayment income sitting between $70,619 and $74,855, their repayment amount would be 3%. If they received a pay rise, pushing them into the $74,856 – 79,346 range, the repayment amount would increase to 3.5% of income. And so on.
These repayment rates were reviewed annually.
So what’s different now?
It’s now a little more like how income tax is calculated! Rather than 18 repayment rates (like in the 2024/25 financial year), there are now 4 thresholds:
- $0 – $67,000: Nil
- $67,001 – $125,000: 15c for each $1 over $67,000
- $125,001 – $179,285: $8,700 plus 17c for each $1 over $125,000
- $179,286 and over: 10% of the total repayment income
As we can see, it’s now quite similar to how the ATO uses thresholds to calculate income tax.
Will people pay more or less?
Generally speaking, the majority of individuals with a HELP debt will end up paying less. This will represent a welcome tax saving. For instance, an individual with a repayment income of $70,000 will now repay $450 (down from $1,750 in the previous year). Someone on $90,000 will repay $3,450 per annum, rather than the previous $4,500.
Importantly, the starting point for payments to commence has changed. In 2024/25, individuals did not need to start repaying to their HELP debt until the annual repayment income hit $54,435. Whereas under the new structure, no repayments are required until an individual’s repayment income is $67,001.
In other words, if you earn a repayment income of $67,000 or less, no HELP repayments are required.
The impact of salary packaging
Remember that salary packaging is grossed-up and shown as reportable fringe benefits on your income statement. So even if you don’t earn over $67,000 as a taxable income, your reportable fringe benefits could push your total repayment income beyond that. That said, salary packaging will usually remain beneficial, due to the significant income tax savings. We explain this in our fact sheet about HELP and Child Support, plus our annual Income Statement explainer.
GO Salary members with HELP debts have access to a detailed and customised earnings estimate calculation, which can be then given to Payroll to ensure the correct extra tax is withheld. Please remember that the the member’s current salary must be entered in the My Profile page to ensure an accurate calculation.
Questions?
We’re happy to answer your questions! We cannot provide financial advice but we can explain how everything works, and help you use the calculation tools. Members can log in and send a message to their dedicated Care Manager via the secure inbox. Or use our contact page!