Compulsory HECS-HELP repayments changed on 1 July 2025. Instead of a flat percentage of your whole income, you now repay only on the dollars above the $67,000 threshold. This calculator shows exactly what that costs for 2025-26 - annually, monthly, and as a share of your income.
How the 2025-26 marginal system works
| Repayment income | Compulsory repayment |
|---|---|
| $0 - $67,000 | Nil |
| $67,001 - $125,000 | 15% of income above $67,000 |
| $125,001 - $179,285 | $8,700 + 17% of income above $125,000 |
| $179,286 and above | 10% of total repayment income |
The $8,700 figure at the start of the third band is exactly 15% of ($125,000 − $67,000) - so the schedule is continuous at the band edges.
Worked example: $90,000 income, $40,000 HELP balance
| Item | Figure |
|---|---|
| Repayment income | $90,000 |
| Outstanding HELP balance | $40,000 |
| Income above $67,000 | $23,000 |
| Rate on that slice | 15% |
| Compulsory repayment | $3,450 |
| Monthly equivalent | $287.50 |
| Effective rate of total income | 3.83% |
| Balance after this year | $36,550 |
| Years to clear (no indexation, constant income) | ~10.6 |
Under the old flat-rate system the same $90,000 income would have owed about 4.5% of the whole amount ($4,050). The marginal system saves roughly $600 this year on these numbers.
Why the monthly figure matters for home loans
Lenders treat the annual compulsory repayment as an ongoing expense when they assess borrowing capacity. At $287.50/month on a $90k salary, that typically knocks $40,000-$70,000 off what you can borrow, depending on the lender's assessment rate and your other commitments. The HELP balance itself is ignored - only the repayment cash-flow matters.
Use the borrowing capacity calculator with this monthly figure in your other commitments, and the income tax calculator to see take-home pay after tax and HECS together.
What this calculator leaves out
- Balance indexation (applied by the ATO on 1 June each year)
- Overseas levy rules for people living abroad
- Multiple-loan repayment order (HELP, then VSL, then SFSS, and so on)
- Building your full ATO repayment-income figure from fringe benefits and investment losses - enter the combined number yourself
Confirm the binding figure on your tax return and your HELP balance in myGov.
Frequently asked questions
How is HECS repaid under the 2025-26 marginal system?
From 1 July 2025, compulsory HELP repayments are calculated only on income above the $67,000 threshold - not as a flat percentage of your whole income. Between $67,001 and $125,000 you pay 15c per dollar above $67,000. Between $125,001 and $179,285 you pay $8,700 plus 17c per dollar above $125,000. At $179,286 and above you pay 10% of your total repayment income.
How much HECS do I repay on a $90,000 salary?
($90,000 − $67,000) × 15% = $3,450 for the 2025-26 income year, or about $287.50 per month. That monthly figure is what most lenders count as an expense when assessing borrowing capacity.
What is repayment income?
Repayment income is broader than taxable income. The ATO starts with taxable income and adds reportable fringe benefits, total net investment losses (including rental losses), reportable super contributions, and exempt foreign employment income. If you only have salary and no extras, taxable income is a close starting point.
Does HECS affect my borrowing capacity?
Yes. Lenders treat the annual compulsory repayment as an ongoing expense for serviceability. On a $90,000 salary the ~$3,450/year repayment typically reduces borrowing capacity by roughly $40,000-$70,000 depending on the lender's assessment rate and other commitments. The HELP balance itself does not matter - only the repayment obligation does. See the borrowing capacity calculator to model it.
What changed from the old HECS repayment system?
Before 2025-26, repayments were a flat percentage of your entire repayment income once you crossed a threshold (for example 3.5% of $80,000 = $2,800). Under the new marginal system the same $80,000 income owes 15% of only the $13,000 above $67,000 = $1,950. Most people pay less; people at or above $179,286 see no change (still 10% of total income).
Do I still repay HECS while studying?
Yes, if your repayment income exceeds the $67,000 threshold. Compulsory repayments apply whether or not you are still enrolled. They are collected through your tax return (and usually via PAYG withholding if you ticked the HECS box on your TFN declaration).
Should I make voluntary HECS repayments?
It depends. Voluntary repayments permanently reduce the balance and cut future indexation, but they are not tax-deductible and the money might earn more elsewhere (offset account, extra home-loan repayments, emergency fund). Run the numbers against your home loan rate and risk tolerance before deciding - a mortgage broker or adviser can help.
When do the thresholds change?
Every income year. The ATO indexes the thresholds with average weekly earnings and publishes the new table before 1 July. This calculator uses the 2025-26 figures ($67,000 / $125,000 / $179,285). Update inputs after 1 July 2026 when the 2026-27 table applies.
Was there a 20% HECS debt reduction?
Yes. From 1 June 2025 the government applied a one-off 20% reduction to all outstanding HELP balances. Your myGov balance should already reflect it. This calculator takes whatever balance you enter - it does not re-apply that reduction.
Sources
Last updated: 20 September 2026