The HECS-HELP repayment threshold for FY2025–26 is $54,435. If your Repayment Income is below this amount, you make no compulsory repayment for the year. Once you exceed the threshold, a percentage of your income is withheld and applied to your HECS balance.
What Is Repayment Income?
Repayment Income is not simply your taxable income. It includes:
- Taxable income
- Reportable fringe benefits
- Reportable employer super contributions (above the SG)
- Total net investment losses
- Exempt foreign employment income
If you salary sacrifice, your reportable employer super contributions may increase your Repayment Income above the threshold — even if your taxable income is below it.
FY2025–26 HECS-HELP Repayment Rates
| Repayment Income | Repayment Rate | Annual Repayment (midpoint) |
|---|---|---|
| Below $54,435 | 0% | $0 |
| $54,435 – $62,849 | 1.0% | ~$586 |
| $62,850 – $66,620 | 2.0% | ~$1,295 |
| $66,621 – $70,618 | 2.5% | ~$1,713 |
| $70,619 – $74,855 | 3.0% | ~$2,177 |
| $74,856 – $79,346 | 3.5% | ~$2,694 |
| $79,347 – $84,107 | 4.0% | ~$3,289 |
| $84,108 – $89,154 | 4.5% | ~$3,899 |
| $89,155 – $94,503 | 5.0% | ~$4,591 |
| $94,504 – $100,174 | 5.5% | ~$5,347 |
| $100,175 – $106,185 | 6.0% | ~$6,175 |
| $106,186 – $112,556 | 6.5% | ~$7,108 |
| $112,557 – $119,309 | 7.0% | ~$8,122 |
| $119,310 – $126,467 | 7.5% | ~$9,236 |
| $126,468 – $134,056 | 8.0% | ~$10,440 |
| $134,057 – $142,099 | 8.5% | ~$11,807 |
| $142,100 – $150,624 | 9.0% | ~$13,256 |
| $150,625 – $159,663 | 9.5% | ~$14,831 |
| $159,664 and above | 10.0% | — |
Rates and thresholds are set by the ATO each financial year. Figures are approximate — always verify with the ATO or a tax agent.
How the Rate Is Applied
The repayment rate applies to your entire Repayment Income, not just the amount above the threshold. This is a marginal-style rate applied to the whole income.
Example:
- Repayment Income: $70,000
- Applicable rate: 3.0%
- Annual HECS repayment: $70,000 × 3.0% = $2,100
HECS Withholding by Employers
Your employer uses your annual income estimate to withhold extra amounts each pay period. At tax time, the ATO reconciles:
- If too much was withheld → refund (or offset against other tax owed)
- If too little was withheld → extra amount payable
To ensure your employer withholds the correct amount, tick the HECS-HELP box on your TFN declaration and keep your income estimate up to date if it changes significantly.
Impact of Large Capital Gains on HECS
A capital gain can push your Repayment Income above the threshold or into a higher repayment band — even if your salary is below the threshold. The compulsory HECS repayment is then due when you lodge your return.
Related Articles
- HECS-HELP Explained
- HECS and Tax Withholding
- How to Declare Your HECS Debt on Your Tax Return
- HECS-HELP Australia hub
Frequently Asked Questions
What is the HECS repayment threshold for 2025–26? $54,435. If your Repayment Income is below this, you make no compulsory HECS repayment for FY2025–26.
Does the HECS repayment rate apply to all my income or just the amount above the threshold? The rate applies to your entire Repayment Income — not just the portion above the threshold. This differs from the income tax brackets, which only apply the marginal rate to income above each bracket.
Can investment income push me into HECS repayments? Yes. Capital gains, dividends, and rental income all form part of your Repayment Income. A large investment gain in a year where your salary is below the threshold can still trigger a HECS repayment.
This article provides general information about HECS-HELP for FY2025–26. Thresholds and rates are set annually by the ATO. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register.