HECS-HELP Repayment Threshold 2026–27: How Much Actually Comes Out of Your Pay?
If you’ve got a HECS-HELP, HELP, TSL, SSL or ABSTUDY SSL debt, the number that matters most this year is $69,528. That’s the compulsory repayment threshold for the 2026–27 income year — the amount of repayment income you can earn before the government starts clawing back any of what you owe. It’s up from $67,000 last year, and it’s indexed to average weekly earnings, so it moves most years.
Here’s the part almost nobody realises until it’s explained to them: crossing that threshold doesn’t mean handing over a slab of your whole pay. Since the 2025–26 income year, repayments have been calculated on a marginal system — you only pay a percentage of the income above each threshold, similar to how income tax brackets work, not a flat rate on everything you earn. That change alone means a lot of people are paying less than they assume.
Below we’ve worked through the actual 2026–27 numbers across a range of incomes, explained what counts as “repayment income” (it’s broader than your salary), and flagged the traps that catch out people with two jobs, a HELP debt and a rental property, or a sole trader ABN.
What’s in this guide
What Changed for 2026–27
The Australian Taxation Office adjusts the study and training loan repayment threshold every year in line with average weekly earnings. For the 2026–27 income year (1 July 2026 to 30 June 2027), that threshold sits at $69,528, up from $67,000 in 2025–26. The full current table is published on the ATO’s Study and training loan repayment thresholds and rates page, last updated 30 June 2026.
This threshold applies to every kind of study and training support loan the ATO administers, not just HECS-HELP — that includes HELP (FEE-HELP, VET Student Loans, VET FEE-HELP), trade support loans (TSL), student start-up loans (SSL) and ABSTUDY SSL. If you owe money under any of these, the same threshold and the same calculation method applies.
The bigger change, though, wasn’t this year — it happened for the 2025–26 income year, when the government moved from the old system to a genuinely marginal one. 2026–27 is only the second year the new method has applied, which is why a lot of people (including plenty who’ve had a HELP debt for years) are still calculating their repayment the old way in their head.
How the Marginal Repayment System Actually Works
Under the old system, your compulsory repayment was worked out by applying a single percentage to your entire repayment income, based on which bracket that income fell into. The practical effect was brutal at the edges: earning one dollar over a threshold could push your whole repayment income into a higher bracket and cost you hundreds of extra dollars for that one dollar of extra income.
The marginal system fixes that. Now, you only pay the relevant percentage on the slice of income that falls within each band — the same logic as Australia’s personal income tax brackets. Here is the full 2026–27 table:
• $0 – $69,528: nil repayment
• $69,529 – $129,717: 15c for every $1 over $69,528
• $129,718 – $186,050: $9,028 plus 17c for every $1 over $129,717
• $186,051 and over: 10% of your total repayment income
For comparison, here’s the 2025–26 table that applied the year before:
• $0 – $67,000: nil repayment
• $67,001 – $125,000: 15c for every $1 over $67,000
• $125,001 – $179,285: $8,700 plus 17c for every $1 over $125,000
• $179,286 and over: 10% of total repayment income
Notice the top band is still expressed as a flat 10% of your entire repayment income rather than a marginal rate. That’s not an inconsistency — it’s a built-in cap. The government structured the bands so nobody pays more under the new marginal system than they would have under the old flat-rate one, and at very high incomes the marginal calculation and the flat 10% land in almost exactly the same place.
Working Out Your Own Repayment
To see what this actually looks like in dollars, here’s the 2026–27 compulsory repayment for a range of repayment incomes, shown as an annual figure and roughly what that works out to per fortnight:
• $60,000 repayment income → $0 (below the threshold)
• $75,000 → $820.80 a year (about $31.57 a fortnight)
• $95,000 → $3,820.80 a year (about $146.95 a fortnight)
• $110,000 → $6,070.80 a year (about $233.49 a fortnight)
• $130,000 → $9,076.11 a year (about $349.08 a fortnight)
• $150,000 → $12,476.11 a year (about $479.85 a fortnight)
• $200,000 → $20,000 a year (about $769.23 a fortnight)
• $250,000 → $25,000 a year (about $961.54 a fortnight)
To calculate your own figure by hand: find which band your repayment income falls into from the table above, then apply that band’s formula. For example, someone with $95,000 in repayment income falls in the second band, so the calculation is 15% of ($95,000 − $69,528) = 15% of $25,472 = $3,820.80. It’s worth doing this yourself once, because the amount actually withheld from your pay through the year is only an estimate — your real compulsory repayment is only finalised when your tax return is assessed.
What Counts as “Repayment Income”
This is where a lot of people underestimate their repayment. Repayment income is not simply your salary or your taxable income — the ATO adds several things back on top of your taxable income to arrive at the figure your repayment is actually calculated on. According to the ATO’s When you must repay your loan page, repayment income is made up of:
• Your taxable income for the year
• Total net investment loss (including negative gearing losses on rental properties)
• Reportable fringe benefits amounts shown on your income statement
• Reportable super contributions (salary sacrifice into super, and personal deductible contributions)
• Exempt foreign employment income
That combination catches people off guard in two common situations. First, if you’re negatively gearing an investment property, that “loss” on paper is added back for HELP repayment purposes — it reduces your taxable income but doesn’t reduce your repayment income the same way. Second, if you’re salary sacrificing heavily into super to bring your taxable income down, the sacrificed amount gets added straight back in as reportable super contributions. Both can mean your compulsory repayment is calculated on a higher figure than your take-home pay would suggest.
How Employers Withhold It From Your Pay
If you tell your employer you have a HELP or other study loan debt (on your Tax File Number declaration when you start a job, or on a withholding declaration if you already work there), payroll withholds an additional amount from each pay using the ATO’s withholding schedules, on top of your normal PAYG tax. Full detail is on the ATO’s Compulsory repayments page.
The important detail most people miss: that extra amount withheld through the year is not applied to your loan balance pay by pay. It simply sits with the ATO as part of your overall PAYG withholding credits until you lodge your tax return. Only once your return is lodged and your actual compulsory repayment for the year is calculated does the ATO apply that repayment against your loan — and reconcile any gap between what was withheld and what you actually owed.
That reconciliation step is exactly why people with two employers often get a surprise. Each employer withholds based only on the income they pay you, using the standard thresholds as if that were your only income. If you earn $40,000 from one job and $40,000 from another, neither employer withholds anything extra, because neither payment on its own crosses the $69,528 threshold — but your combined repayment income of $80,000 clearly does, so you’ll owe a compulsory repayment at tax time that nothing was withheld for during the year.
Sole Traders, Freelancers and Gig Workers
If you run your own business as a sole trader, drive for a rideshare platform, deliver for Uber Eats or DoorDash, or otherwise earn business income under an ABN, there’s no employer withholding anything on your behalf. Instead, if you’re in the PAYG instalment system, the ATO factors your HELP debt into your instalment rate or instalment amount, so part of what you’re already paying quarterly is earmarked to cover your expected compulsory repayment.
If your instalment rate doesn’t reflect what you actually expect to earn this year — say your income has dropped, or jumped — you can vary your PAYG instalments to bring them closer to reality; our PAYG instalment guide walks through how the instalment system fits together. For gig economy workers who aren’t in the instalment system at all yet, the safest approach is to set aside a percentage of every payment you receive — for both income tax and your HELP repayment — rather than discovering both bills at once when your return is assessed.
The 20% Debt Cut — and Why It’s a Different Thing Entirely
You may remember hearing that HELP debts were cut by 20%. That was real: legislation reduced every outstanding HELP, VET Student Loan, Australian Apprenticeship Support Loan and other study loan balance by 20%, applied on 1 June 2025 before that year’s indexation, as confirmed on Study Assist. For someone with an average-sized debt, that knocked several thousand dollars off their balance in one hit.
That reduction and the change to the repayment threshold/marginal system were legislated together, which is probably why the two get mixed up. But they are different things: the 20% cut was a one-off reduction to your loan balance, applied once, on that date. It doesn’t recur every year, and it has no ongoing effect on how much you repay in any given income year — that’s entirely governed by the annual threshold and marginal rates covered above.
Which Year’s Numbers Actually Apply to You Right Now
This is worth spelling out clearly, because it’s the single most common point of confusion we see. We’re currently in the 2026–27 income year, which started on 1 July 2026. That means:
• The $69,528 threshold and the marginal table above are what’s governing the extra tax being withheld from your pay right now, and they’ll govern the compulsory repayment calculated on the 2026–27 tax return you lodge next year, due by 31 October 2027.
• If you’re about to lodge your 2025–26 tax return — due by 31 October 2026, which is very soon — that return is assessed under the 2025–26 thresholds: the $67,000 threshold and the table topping out at $125,000 and $179,285. That’s correct for that return, even though it’s a different, lower threshold to the one you’ll see quoted for the current year.
If your tax agent, myTax pre-fill, or a calculator you find online quotes $67,000 while you were expecting to see $69,528 (or the other way around), check which income year it’s actually talking about before assuming something is wrong. Both figures are correct — just for different years.
If You Move Overseas
A HELP or other study loan debt doesn’t disappear because you leave Australia. Australian residents (and some non-residents, depending on their situation) with an outstanding loan are still required to lodge with the ATO each year and report their worldwide income so a compulsory repayment can be calculated, following the same repayment income rules and thresholds covered above. The ATO’s overseas obligations page sets out the reporting requirements for people living or working overseas.
Common Mistakes We See
• Assuming the extra amount withheld each payday is already paying down the loan — it isn’t, until your tax return is lodged and assessed.
• Having two (or more) jobs and assuming that because neither employer withholds extra, nothing is owed — your combined income is what counts.
• Forgetting that salary-sacrificed super contributions and negatively geared rental losses are added back into repayment income.
• Mixing up the one-off 20% balance reduction with the annual repayment calculation — they’re unrelated.
• Assuming last year’s threshold still applies, when the figure changes every income year.
Should You Make Voluntary Repayments?
You can make a voluntary repayment against your HELP debt at any time, on top of whatever is withheld or paid through the compulsory system, and there’s no bonus or discount for doing so under the current rules. Whether it’s worth prioritising over other debts or savings goals depends on your own indexation rate, interest rates elsewhere, and how close you are to other financial goals — it’s a personal cash-flow decision rather than something with one right answer, so it’s worth talking through your specific numbers with a registered tax agent or financial adviser rather than following a general rule of thumb.
Doing It Yourself vs Getting It Checked
If your only income is a single PAYG salary, the system largely runs itself: your employer withholds using the ATO’s schedules, and the ATO reconciles the exact figure when your return is lodged. Where it gets genuinely easy to get wrong is anywhere with more moving parts — two jobs, sole trader income alongside PAYG instalments, a negatively geared property, or salary sacrifice arrangements that push your repayment income above what your bank balance suggests.
That’s usually when it’s worth having someone check the numbers rather than guess. Here’s how it works with us: you send through your payslips (or your BAS and instalment notices if you’re a sole trader) along with a rough picture of any other income, a registered tax agent checks how your repayment income is actually tracking against the 2026–27 thresholds, and we flag early if you’re likely to be under- or over-withheld before it turns into a surprise bill or a bigger-than-expected refund at tax time.
If HECS-HELP is just one part of a bigger tax return question, our online tax return service is the easiest place to start, and our tax calculator can give you a quick estimate of where your overall tax position sits before you commit to anything.
Frequently Asked Questions
What is the HECS-HELP repayment threshold for 2026–27?
$69,528. Once your repayment income for the year goes above that figure, a compulsory repayment is calculated on the portion above the threshold using the marginal rates set out earlier in this guide.
Do I have to repay HECS-HELP if I earn under $69,528?
No compulsory repayment is required if your repayment income for the 2026–27 year is at or below $69,528. You can still make voluntary repayments at any time if you want to reduce your balance faster.
Is the HECS repayment calculated on my salary or my taxable income?
Neither exactly — it’s calculated on “repayment income,” which starts with your taxable income and then adds back reportable fringe benefits, net investment losses, reportable super contributions and exempt foreign income, as explained above.
What happens if I have two jobs and a HELP debt?
Each employer withholds based only on what they pay you, so if neither job alone crosses the threshold, you may end up with nothing withheld even though your combined income does trigger a repayment. It’s worth notifying your employers and setting money aside yourself if this applies to you, so tax time doesn’t come as a shock.
Does the 20% HELP debt reduction happen every year?
No. The 20% reduction was a one-off measure applied to outstanding balances on 1 June 2025. It has no bearing on how your compulsory repayment is calculated in 2026–27 or any future year.
How does HECS-HELP repayment work if I’m a sole trader?
If you’re in the PAYG instalment system, the ATO builds your HELP debt into your instalment rate or amount. If your instalments are based on outdated figures, they can be varied to better reflect your current income — our PAYG instalment guide has more detail on how that works.
Does a HECS-HELP debt affect my home loan borrowing power?
Generally yes — most lenders treat an outstanding HELP debt as an ongoing liability when assessing how much you can service, similar to a personal loan repayment, because it reduces your take-home pay. The exact impact varies by lender, so it’s worth discussing with your mortgage broker or lender directly.
Can I pay off my HECS-HELP faster with voluntary repayments?
Yes, voluntary repayments can be made at any time on top of your compulsory repayments, though there’s no discount for doing so under the current rules. Whether it makes sense for you depends on your broader financial position.
What if I move overseas — do I still have to repay?
Yes. Australians with an outstanding HELP or study loan debt generally still need to lodge with the ATO and report their worldwide income while overseas, so a compulsory repayment can continue to be calculated under the same rules.
My employer isn’t withholding extra for my HELP debt — what should I check?
Make sure you’ve declared your study loan debt on your Tax File Number declaration or withholding declaration with each employer you work for. If that’s already ticked and nothing is being withheld, it’s worth raising it with payroll or getting a registered tax agent to check your pay setup before it becomes a larger bill at tax time.
Disclaimer
This article provides general information only and does not constitute personal tax or financial advice. It does not take into account your objectives, financial situation or needs. Tax rules change and apply differently to each person’s circumstances. Before acting, please seek advice from a registered tax agent. Baron Tax & Accounting accepts no liability for any loss arising from reliance on this article. Source references: ATO (ato.gov.au) and other Australian government agencies, current as at the date of publication.
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