The new marginal HECS repayment system (FY 2025-26 onwards)

From the 2025–26 income year onwards, HECS-HELP compulsory repayments use a marginal rate system. The threshold above which you pay anything was raised from $54,435 to $67,000. For income above that, you pay only on the slice in each bracket — exactly how income tax works.

The brackets (FY 2025-26)

• $0–$67,000: No compulsory repayment.
• $67,001–$125,000: 15 cents for each dollar over $67,000.
• $125,001–$179,285: $8,700 + 17 cents for each dollar over $125,000.
• $179,286 and above: 10% of total repayment income.

Worked examples

$80,000 repayment income: 15% × ($80,000 − $67,000) = $1,950 compulsory.

$120,000 repayment income: 15% × ($120,000 − $67,000) = $7,950.

$150,000 repayment income: $8,700 + 17% × ($150,000 − $125,000) = $12,950.

$200,000 repayment income: 10% × $200,000 = $20,000.

What "repayment income" actually means

Not just your salary. The ATO adds:

• Taxable income
• Reportable fringe benefits
• Reportable super contributions (salary-sacrificed + personal deductible)
• Net investment losses (rental + financial)
• Exempt foreign employment income

Salary sacrificing into super used to be a HECS-avoidance play. After the reportable-super addback, that loophole is largely closed.

How this changes the early-repayment math

Two effects:

1. Higher threshold means more people pay $0 compulsory. If you earn $65,000, you pay nothing through tax — your only debt growth is indexation. Voluntary repayment becomes more attractive in absolute terms, but indexation at 2.80% is still beatable by savings.
2. Marginal rates ease the cliff effect. Pre-2025, hitting $54,436 income triggered the full whole-of-income percentage on everything you earned. Now you pay only on the excess, which means less surprise tax bills and less incentive to underearn.

The calculator uses the new system — your projected balance trajectory accounts for compulsory repayments under the marginal brackets.