HECS Debt Repayment Thresholds 2025-26 Explained

If you have a HECS or HELP debt, your repayments are based on your repayment income and the HECS repayment threshold 2025 set by the government. Once your income is above the lowest threshold for the 2025-26 year, you pay a percentage of your repayment income toward your debt. The percentage increases as your income rises. This guide explains how the HECS repayment threshold 2025 and the repayment rates work, and how to estimate what will be withheld from your pay. You can also use our free HECS debt calculator to see your estimated repayments at different income levels.

What is repayment income?

For HECS/HELP, your “repayment income” is generally your taxable income plus any total net investment loss, reportable fringe benefits, reportable super contributions, and exempt foreign employment income. It’s often close to your gross salary if you have no big deductions or other income. The ATO uses this figure to work out which repayment bracket you’re in.

How the 2025-26 repayment thresholds work

Each year the government sets a minimum repayment threshold (for 2025-26, check the ATO or legislation for the exact figure—it’s typically in the low $50,000s for the first threshold). Below that, your compulsory repayment is nil. Above it, you pay a percentage of your whole repayment income, not just the amount over the threshold. The percentage rises in steps: for example, 1% at the lowest bracket, then 2%, 3%, and so on up to 10% at the top bracket. The exact thresholds and rates are updated annually.

How much will be withheld from my pay?

Your employer withholds HECS/HELP repayments based on your expected repayment income for the year. If you have more than one job or your income changes, the total withheld might not exactly match your actual compulsory repayment—you’ll square it up when you lodge your tax return. Use our HECS debt calculator to get an idea of the repayment at your salary; it uses the latest thresholds and rates.

Voluntary repayments and indexation

You can make voluntary repayments at any time to pay down your debt faster. There’s no bonus for voluntary repayments anymore, but reducing the balance means less indexation (the debt is indexed each June in line with inflation). Indexation increases your debt slightly each year if you don’t repay enough to offset it. Planning your repayments using the current HECS repayment threshold 2025 and rates helps you see when you’re likely to clear the debt.

Impact on take-home pay

HECS repayments reduce your take-home pay because they’re withheld like tax. When you use a take-home pay calculator, make sure you tick “I have a HECS/HELP debt” so the estimate includes the correct repayment. Our pay calculator includes HECS so you see your net pay after tax, Medicare and HECS.