HECS/HELP Repayments in 2026–27: What Comes Out of Your Pay

What HECS/HELP is

HECS-HELP is the Australian Government loan scheme that lets eligible students defer their tuition fees. The balance is indexed each year rather than charged interest, and you only start repaying it once your income passes a set threshold. Several related loans — VET Student Loans, SFSS, Student Start-up Loans and others — are covered by the same set of repayment rules.

The marginal repayment system

From the 2025–26 income year onward, the ATO moved to a marginal repayment system. This is the key change to understand. Under the old system, once you crossed a threshold you repaid a percentage of your entire income. Under the marginal system, you only repay on the portion of income above the first threshold — exactly like the way income-tax brackets work. The result is that crossing a threshold no longer causes a sudden jump in repayments.

2026–27 repayment thresholds

For 2026–27, no compulsory repayment applies until your repayment income exceeds $69,528. Above that, repayments are calculated on the slice of income over the threshold:

• $0 – $69,528: no compulsory repayment.
• $69,529 – $129,717: 15 cents for each $1 over $69,528.
• $129,718 – $186,050: $9,028 plus 17 cents for each $1 over $129,717.
• $186,051 and over: 10% of your total repayment income.

So someone earning $85,000 repays 15% of the amount above $69,528 — about $2,321 for the year — rather than a flat percentage of the whole $85,000. That marginal design is why the system is fairer than the old "step" thresholds it replaced.

What counts as repayment income

Your repayment income is more than just your salary. It's your taxable income plus certain add-backs — reportable fringe benefits, total net investment losses, reportable super contributions, and exempt foreign employment income. For most people on a straightforward salary with no investment losses or extra super contributions, repayment income is simply their taxable income, but it's worth knowing the broader definition exists.

How it hits your take-home pay

If you have a student loan, your employer withholds an estimated repayment from each pay, alongside income tax and the Medicare levy. That means your take-home pay is lower than someone on the same salary without a loan. When you use a pay calculator, tick the "has HECS/HELP debt" option to see the difference — for many mid-range salaries it is a few thousand dollars a year, which is worth planning around.

The practical takeaway: a HECS/HELP debt won't stop you getting ahead, but it does quietly reduce your fortnightly pay once you're over the threshold. Knowing the marginal brackets — and modelling your real take-home — means no surprises when you look at your payslip.