How HECS/HELP Repayments Work in Australia
Updated 2026-06-11 · 2025-26 & 2026-27 financial years · 6 min read
From 1 July 2025, HECS-HELP uses a new marginal repayment system. You only repay on income above the $67,000 threshold — not on your full income. This guide explains exactly how it works, with worked examples.
What Changed on 1 July 2025?
Before 2025-26, HECS used a step-rate system: once your income crossed a threshold, your repayment rate applied to your entire income. This created a "cliff effect" where earning $1 more could cost you thousands in extra repayments.
From 1 July 2025, repayments only apply to the income above each threshold — like how income tax brackets work. This is fairer and eliminates the cliff effect.
2025-26 HECS Repayment Rates
| Repayment Income | Repayment Rate | Annual Repayment |
|---|---|---|
| $0 – $66,999 | 0% | $0 |
| $67,000 – $124,999 | 15c per $1 above $67,000 | Up to $8,700 |
| $125,000 – $179,284 | $8,700 + 17c per $1 above $125,000 | Up to ~$18,100 |
| $179,285+ | 10% of total income | Capped at 10% |
Source: studyassist.gov.au · 2025-26 rates
Worked Example: $90,000 Salary
How the ATO Collects Repayments
Your employer withholds HECS repayments from your pay if you have told them you have a HECS-HELP debt (via your Tax File Number declaration). The withholding is based on your annual salary and happens automatically each pay period.
At tax time, the ATO reconciles your actual repayment income with what was withheld. If too much was withheld, you get a refund. If too little, you have a balance owing.
Indexation
HECS-HELP debts are indexed to the Consumer Price Index (CPI) each year on 1 June. High inflation years (like 2023) significantly increased debt balances. The government changed the indexation cap to 3% from 2023-24, but this is subject to ongoing legislation.
Frequently Asked Questions
What is the HECS-HELP repayment threshold in 2025-26?
The compulsory repayment threshold is $67,000 of repayment income for 2025-26. If you earn below $67,000, you make no compulsory HECS repayments that year.
How much HECS do I repay on a $90,000 salary?
On a $90,000 salary under the 2025-26 marginal system, your HECS repayment is 15% of the amount above $67,000 — which equals $3,450 per year, or about $133 per fortnight.
Does HECS apply to my whole income or just above the threshold?
Under the new marginal system (from 1 July 2025), repayments only apply to income above the $67,000 threshold — not your whole income. This is a fairer system than the old step-rate approach.
When will I pay off my HECS debt?
It depends on your salary and debt balance. Higher earners pay it off faster. Use our HECS Repayment Calculator to estimate your payoff date based on your actual balance and salary.
Calculate your HECS repayment
Enter your salary and debt balance to see your fortnightly repayment and estimated payoff date.
HECS Repayment Calculator →