From the 2025–26 income year, the way compulsory repayments for HECS/HELP (and other study loans) are calculated has changed significantly.

• The minimum income threshold — the level at which you must start repaying — has been raised to AU$67,000 (from around AU$54,435 in 2024–25).
• More importantly, the repayment is now marginal: you only repay on the portion of your income above that threshold, rather than on your entire income once you exceed the threshold.
• The new repayment rates for 2025–26 are:
  • 15 c for every dollar over $67,000 up to $125,000
  • AU$8,700 plus 17 c for every dollar over $125,000 up to $179,285
  • For incomes $179,286 or more, the repayment remains 10% of total income.

According to the government, these reforms will mean most borrowers will pay less in compulsory repayments — especially those below or near the new threshold.

Why the Change?

• The raise to $67,000 and marginal repayment structure aim to make the repayment system fairer — letting people earn more before repayments start, and ensuring repayments are proportionate.
• For many people, especially those earning under about $180,000, the reforms reduce the annual repayment burden.
• The thresholds and rates will continue to be indexed over time in line with average weekly earnings.

Example: Someone Earning AU$140,000 — Before vs After

Let’s see how these changes affect a hypothetical borrower with a repayment income of AU$140,000.

Under the old (2024–25) system

• The repayment threshold was ~AU$54,435.
• Once above that threshold, repayment rates applied to all income.
• According to the 2024–25 schedule, someone with $140,000 would likely fall into a bracket with ~8.5% repayment rate (for incomes roughly $134,057 – $142,100)
• That means the compulsory repayment would have been ~ $140,000 × 8.5% ≈ AU$11,900.

Under the new (2025–26) system

• The first $67,000 is not repaid against. So only $73,000 (i.e. $140,000 – $67,000) is subject to repayment.
• Since $140,000 falls between $125,001 and $179,285, the formula is: $8,700 + 17 c for each dollar over $125,000.
• The “excess over $125,000” is $15,000.
• So repayment = $8,700 + (0.17 × $15,000) = $8,700 + $2,550 = AU$11,250.

Bottom line: under the new system with $140,000 income, a borrower would repay about AU$11,250 — roughly $650 less than under the old system (i.e. about a 5–6% reduction in their compulsory repayment).

What This Means for Most Borrowers

• If you earn under $67,000, you no longer need to make a compulsory repayment at all.
• If you earn somewhere between $67,000 and, say, $120–130 k, you’ll likely see a substantial reduction in repayments compared with prior years.
• If you earn higher — but under the top tier threshold — you’ll still pay less than you would have under the old flat-rate system (because you’re only taxed on the portion above $67,000).
• Only very high earners (above ~$179,285) will see little to no difference in percentage terms, since they still pay 10% of total income.

What to Watch Out For

• The “repayment income” used to assess your loan is not just your salary — it includes other income sources (like investments, reportable fringe benefits, net rental losses, etc.).
• Compulsory repayments are assessed at tax time. If your employer withheld too much (based on old thresholds or estimates), you might get a refund.

You can still make voluntary repayments at any time — which can help reduce your debt balance faster or get ahead of indexing.

Final Thoughts

The 2025–26 changes to HECS/HELP repayment thresholds and structure mark a meaningful shift — especially for middle-income earners. By raising the threshold to $67,000 and switching to a marginal repayment system, the changes aim to ease the repayment burden and make repayments fairer.

For many people — even those on six-figure salaries — this could result in hundreds or thousands of dollars saved each year compared with the old system. If you haven’t already, it’s worth using the official calculator the Australian Taxation Office (ATO) provides to estimate what you’ll repay under the new rules.