HECS-HELP Repayment Thresholds 2024-25
If you have a HELP, HECS-HELP, or other study/training loan, compulsory repayments are calculated based on your repayment income once it exceeds the minimum threshold.
Key Points
- No repayment required if income is below $51,550
- Repayment rates range from 1% to 10%
- The rate applies to your entire repayment income, not just the amount over the threshold
- Repayments are withheld from your pay by your employer if you indicate a HELP debt on your TFN declaration
2024-25 Repayment Rates
| Repayment Income | Rate |
|---|---|
| Below $51,550 | 0% |
| $51,550 – $59,518 | 1% |
| $59,519 – $63,089 | 2% |
| $63,090 – $66,875 | 2.5% |
| $66,876 – $70,888 | 3% |
| $70,889 – $75,140 | 3.5% |
| $75,141 – $79,649 | 4% |
| $79,650 – $84,429 | 4.5% |
| $84,430 – $89,494 | 5% |
| $89,495 – $94,865 | 5.5% |
| $94,866 – $100,557 | 6% |
| $100,558 – $106,590 | 6.5% |
| $106,591 – $112,985 | 7% |
| $112,986 – $119,764 | 7.5% |
| $119,765 – $126,950 | 8% |
| $126,951 – $134,568 | 8.5% |
| $134,569 – $142,642 | 9% |
| $142,643 – $151,200 | 9.5% |
| $151,201+ | 10% |
How HECS-HELP Repayments Are Calculated
HECS-HELP repayments are calculated annually by the Australian Taxation Office (ATO) based on your repayment income — not your gross or taxable income. Repayment income includes your total income from employment, investments, and business activities, minus certain deductions such as net capital losses and deductible superannuation contributions. Once your repayment income exceeds the minimum threshold of $51,550, a percentage of your entire repayment income is withheld, not just the amount above the threshold. For example, if your repayment income is $60,000, the 1% rate applies to the full $60,000, resulting in a $600 repayment. This differs from marginal tax rates, where only income within a bracket is taxed at that rate. It's important to understand this because even a small increase in repayment income can push you into a higher repayment tier, significantly increasing your annual repayment amount. Employers collect these repayments through the pay-as-you-go (PAYG) system if you’ve provided your Tax File Number (TFN) and indicated you have a HELP debt on your TFN declaration form.
Voluntary vs Compulsory Repayments
While compulsory repayments are automatically deducted from your salary once your repayment income exceeds the threshold, you also have the option to make voluntary repayments at any time — even if your income is below the threshold. Voluntary repayments of $500 or more attract a 5% bonus, reducing your overall debt. For instance, a $1,000 voluntary repayment only counts as $1,050 toward your debt. This bonus can be especially beneficial if you expect your income to rise in the coming year and want to avoid higher repayment rates. However, it’s important to consider your financial situation first — the 5% bonus is a real benefit, but only makes sense if you have surplus funds and no higher-interest debts to pay off. Additionally, voluntary repayments do not affect your annual compulsory repayment calculation; they simply reduce the principal amount of your debt. If you’re planning to make a large voluntary repayment, it’s advisable to do so before the end of the financial year (30 June) to ensure it’s processed in time for the current income year and to maximise the bonus benefit.
Common Mistakes and Tips for Managing Your HECS-HELP Debt
Many borrowers make avoidable mistakes when managing their HECS-HELP debt. One common error is failing to update your TFN declaration when your employment situation changes — for example, moving from part-time to full-time work or changing employers. If your employer isn’t aware of your debt, repayments won’t be withheld, and you may face a large ATO bill at tax time. Another mistake is underestimating your repayment income; remember that investment income, rental profits, and even some government payments may be included. To avoid surprises, use our Australian Salary Calculator to estimate your repayment income and annual repayment amount before the end of the financial year. It’s also wise to review your repayment strategy annually — especially if you’re approaching a higher threshold bracket. If you’re nearing the threshold, consider adjusting your work hours or timing large bonuses to stay in a lower repayment tier. Finally, keep all payment receipts and ATO correspondence in one place; the ATO provides annual statements that detail your debt balance, repayments made, and any interest or indexation applied.