HECS-HELP Repayment Calculator for FY2025-26
From 1 July 2025 HECS-HELP switched from 18 progressive bands to a 4-band marginal system under the Universities Accord (Cutting Student Debt by 20 per cent) Act 2025. Enter your repayment income to see exactly what the ATO will deduct under the new rules.
About this calculator
The big news for FY2025-26: HECS-HELP repayments now use a marginal rate system, with the minimum repayment threshold raised from $54,435 to $67,000. Below $67,000 you owe nothing. Between $67,001 and $125,000 you repay 15 cents on every dollar above $67,000. Between $125,001 and $179,285 you start with a $8,700 base (which equals 15% × $58,000, fully phased through tier one) plus 17 cents on every dollar above $125,000. Only the top tier — $179,286 and above — reverts to a flat 10% on your total repayment income.
The shift from the old flat-on-total system removes most of the cliff effect that used to make a $1 pay rise cost hundreds in extra HECS. Under the old rules, repayment income of $54,435 paid zero but $54,436 paid 1% on the entire $54,436 — about $544 lost at the boundary. Under the new rules, $67,001 costs $0.15, $80,000 costs $1,950, and $125,000 costs $8,700. There is still one small cliff at $179,286 because tier three is flat-on-total: $17,928.45 at $179,285 jumps to $17,928.60 at $179,286. Negligible in practice, but technically present.
Repayment income is broader than taxable income. The ATO defines it as taxable income plus reportable fringe benefits, plus reportable employer super contributions, plus net investment loss (negative gearing add-back), plus exempt foreign employment income. That means salary sacrificing into super, novated leases, and rental losses can still push your repayment income — and your HECS — higher than your payslip suggests. The calculator asks for repayment income directly so the result reflects the figure the ATO actually uses at lodgement.
HECS repayments are not netted against your PAYG withholding — they're an additional liability on your tax return. Your employer withholds extra tax each pay cycle based on your weekly pay grossed up to an annual figure, then the ATO reconciles the actual amount at lodgement. If you have multiple jobs, bonuses, or significant investment income, the withheld amount is often too low. Tick the HECS box on every employer's Tax File Number Declaration to keep withholding closer to the final liability.
How to use
- 1Calculate your repayment income: taxable income + reportable fringe benefits + reportable super + net investment loss + exempt foreign income
- 2Enter your repayment income figure into the calculator
- 3The calculator applies the FY2025-26 marginal schedule (15c above $67k, 17c above $125k, or 10% flat above $179,285)
- 4Compare the result to the HECS amount your employer has already withheld year-to-date
- 5If withholding falls short, set aside the gap so you don't get a surprise bill at lodgement
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Frequently asked questions
What changed for HECS-HELP from 1 July 2025?
Two big things. First, the Universities Accord (Cutting Student Debt by 20 per cent) Act 2025 wiped 20% off every outstanding HELP balance — that happened in mid-2025 automatically through the ATO. Second, from FY2025-26 onwards compulsory repayments use a 4-band marginal system: nil below $67,000, then 15c × (income − $67,000), then $8,700 + 17c × (income − $125,000), then 10% flat on total income above $179,285. The old 18-band progressive system that taxed your entire repayment income at a single rate is gone.
What's the HECS repayment threshold for FY2025-26?
$67,000 — up from $54,435 under the old system. Earn at or below this and your compulsory repayment is zero, regardless of your HELP debt balance. Voluntary repayments are still allowed below the threshold and pay your debt down faster, but they don't reduce your taxable income or change the current year's compulsory amount.
Does the HECS rate now apply only to the income above the threshold?
Yes for the first two tiers, no for the top tier. From $67,001 to $179,285 it's a true marginal calculation — only the excess over each band's lower edge is taxed at that band's rate. But for repayment income above $179,286, the rate reverts to 10% applied to your TOTAL repayment income (not just the excess over $179,285). This is the only non-marginal tier and creates a small step at the boundary.
What counts as 'repayment income' for HECS?
Repayment income is broader than taxable income. The ATO adds reportable fringe benefits (like a novated lease), reportable employer super contributions (salary sacrificed super), net investment loss (the negative gearing add-back), and exempt foreign employment income to your taxable income. The total is what's tested against the FY2025-26 thresholds. Salary sacrificing into super or running a negatively geared property can push you across the $67k threshold or up into the $125k tier even when your payslip looks unchanged.
Why do I owe HECS at tax time even though my employer withheld extra?
Employer withholding is based on your weekly pay grossed up over 52 weeks, treating each pay cycle in isolation. It can fall short when you have multiple jobs (each employer assumes you only work for them), receive bonuses or commissions late in the year, have significant investment income or capital gains, or salary sacrifice into super. The ATO reconciles the true repayment income at lodgement and bills the difference. To reduce the gap, tick the HELP box with every employer and consider voluntary top-ups during the year.
Can I reduce my compulsory HECS repayment legally?
You can't avoid a compulsory repayment once your repayment income crosses $67,000, but you can manage the underlying number. Legitimate work-related deductions reduce taxable income and therefore repayment income — and under the marginal system this now directly reduces the 15c (or 17c) tax on each dollar moved below the threshold, not just the cliff. Voluntary repayments don't reduce the current year's compulsory amount but pay your debt down faster. Salary sacrificing into super lowers taxable income but adds back as reportable employer super, so it usually doesn't reduce repayment income — confirm the net effect before relying on it.
Authoritative sources
All rates and thresholds used in this calculator are sourced from the Australian Taxation Office (ATO).
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