HECS-HELP repayments 2026–27: thresholds, marginal rates and examples
Compulsory study loan repayments now apply only to income above the threshold. For 2026–27 that threshold is $69,528. Here's how the system works and what you'll repay.
The 2026–27 thresholds
| Repayment income | Repayment |
|---|---|
| $0 – $69,528 | Nil |
| $69,529 – $129,717 | 15c for each $1 over $69,528 |
| $129,718 – $186,050 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of total repayment income |
From percentages to marginal rates
Until 2024–25, once your repayment income crossed the threshold you repaid a percentage of your entire income — 1% at the bottom rising to 10%. A small pay rise could push you into a higher band and cost more than it earned you. From 2025–26 the system is marginal: you repay 15 cents for each dollar above the minimum threshold, and 17 cents in the next band. Only above $186,050 in 2026–27 does a flat 10% of total income apply.
The ATO's own illustration: at $80,000 of repayment income, the old system would have taken $2,800, while the 2025–26 marginal system takes $1,950. In 2026–27, with the threshold indexed up to $69,528, the same income repays $1,570.80.
What counts as repayment income
- Taxable income, excluding any assessable First Home Super Saver released amounts.
- Reportable fringe benefits.
- Total net investment loss, including net rental losses.
- Reportable super contributions, including salary sacrifice.
- Exempt foreign employment income.
Adding these back stops people reducing their repayment through salary packaging or negative gearing.
Three ATO examples
Christina's taxable income is $60,470, and with fringe benefits, an investment loss, reportable super and exempt foreign income, her repayment income is $86,380. She repays 15% of $16,852, or $2,527.80.
Barry has taxable income of $118,450 and $18,614 reportable super, so repayment income of $137,064. He repays $9,028 plus 17% of $7,347: $10,276.99.
Priya's repayment income is $254,780, above the top threshold, so she repays 10%: $25,478.
Check your own figures with the HECS-HELP repayment calculator, which uses the same thresholds.
Which loans this covers
One set of thresholds and rates covers HELP (including HECS-HELP and FEE-HELP), VET Student Loans, the Student Financial Supplement Scheme, Student Start-up Loans, ABSTUDY Student Start-up Loans and Australian Apprenticeship Support Loans. If you have more than one, repayments clear them in that order.
Withholding through the year
When you tell your employer about a study loan, they withhold extra tax from each pay using the ATO's study and training support loan tables, which were updated for the marginal system. Withholding is an estimate; the ATO calculates the actual repayment when you lodge.
Indexation and the 20% reduction
Loan balances are indexed each 1 June at the lower of CPI and the Wage Price Index; the rate on 1 June 2026 was 2.8%. A one-off 20% reduction was applied to loans that existed on 1 June 2025, and the ATO has finished applying it. Neither affects how compulsory repayments are calculated.
Should you make voluntary repayments?
Study loans charge no interest, only indexation, so voluntary repayments mainly make sense if you want to clear the debt sooner or expect indexation to outpace what you'd earn elsewhere. It's a personal decision; consider your other debts and savings first.
Two jobs and study loans
If you have more than one employer, the study loan withholding usually applies only where you claim the tax-free threshold, so it may underestimate what you owe. The ATO assesses repayment on your combined repayment income, so it's worth asking your second employer to withhold extra, or setting money aside, to avoid a bill after you lodge.
Moving overseas
If you move overseas for six months or more, you need to update your contact details with the ATO and report your worldwide income each year. Overseas debtors use the same thresholds and rates, applied to worldwide income. If your worldwide income is at or below 25% of the minimum threshold, you lodge a non-lodgment advice instead.
Paying it off early
A voluntary repayment reduces your balance straight away but doesn't reduce your compulsory repayment for the year, which is based on income. Since there's no interest, compare the indexation rate with what the money could earn elsewhere or save on other debts before deciding.
Because thresholds are indexed every year, review your expected repayment each July using the calculator rather than assuming last year's figure still applies. If your income is close to the minimum threshold, small changes such as a salary-sacrifice arrangement can decide whether any repayment is due.
How the 2025–26 thresholds compare
In 2025–26 the minimum repayment income was $67,000, the 17% band started at $125,000 and the 10% rule applied from $179,286. Indexation lifted each threshold for 2026–27, so most people with the same income repay slightly less this year. At $80,000 the 2026–27 repayment is about $380 lower than in 2025–26.
Try it: HECS-HELP repayment calculator — Compulsory study loan repayment under the 2026–27 marginal system.