A worked example
Sarah is a nurse in Brisbane earning $75,000 per year. She has a HELP debt of $28,000 from her nursing degree. Under the new marginal repayment system that applies for 2025-26, compulsory repayments only apply to the portion of her income above $67,000, not her whole salary.
Her compulsory repayment is: ($75,000 - $67,000) × 15% = $1,200 per year. That works out to about $46 per fortnight, which her employer withholds from her pay and sends to the ATO at tax time.
On the indexation side, from 1 June 2025 HELP debts are indexed by the lower of CPI or the Wages Price Index (WPI). The government also applied a one-off 20% reduction to all HELP balances as at 1 June 2025. So Sarah's debt was cut before her first 2025-26 repayment even landed.
With lower indexation and the new marginal system, her repayment now makes genuine progress on her balance rather than mostly chasing indexation like it did under the old cliff system.
State-by-state differences
HELP repayments are based on your total repayment income reported to the ATO, so they work the same across all Australian states and territories. Your location doesn't change the repayment threshold or rates.
- NSW, VIC, QLD, WA, SA, TAS, ACT, NT: All states use the same ATO repayment settings. For 2025-26 the minimum repayment threshold is $67,000 under the new marginal system, where compulsory repayments are 15% of each dollar earned above the threshold (not a flat percentage of total income as in earlier years).
- Income variations by state: Cost of living and median salaries vary significantly. A Sydney teacher on $85,000 faces the same repayment rate as a Perth teacher on $85,000, even though Sydney's higher housing costs mean less disposable income.
- Overseas residents: If you move overseas for more than six months, different rules apply. You must register with the ATO and declare worldwide income. Non-compliance can lead to penalties and debt recovery.
- Multiple income sources: If you work across state borders (for example, living in Queanbeyan but working in Canberra), your combined repayment income from all sources determines your compulsory repayment.
Common mistakes people make
- Forgetting salary-packaged benefits count as repayment income: Many people think only their take-home pay matters. Wrong. Reportable fringe benefits, salary-sacrificed super above the concessional cap, and reportable employer super contributions all add to your repayment income. A nurse earning $65,000 who salary packages $10,000 has a repayment income of $75,000 and jumps to a higher marginal repayment than they expected, because the 15% now applies to every extra dollar above $67,000 including salary-packaged amounts.
- Not making voluntary payments when interest/indexation is high: Some people figure "it's interest-free, so why pay extra?". Indexation can add thousands per year to large debts. If your compulsory repayment barely covers indexation, your debt grows. Voluntary payments through myGov go straight to principal and help you get ahead, especially if you expect pay rises that push you into higher brackets.
- Thinking HELP debt disappears after a set time: Unlike some overseas student loans, Australian HELP debt doesn't expire after 20 or 30 years. It stays with you until paid off or until you die. It is wiped on death, but expecting this as a strategy is grim planning.
- Not updating ATO details when moving overseas: If you leave Australia for more than six months and don't notify the ATO, you can face penalties and debt recovery action. The ATO actively pursues overseas debt, and you're required to make repayments regardless of the standard income threshold.
What this calculator doesn't account for
This calculator estimates your compulsory HELP repayment based on annual repayment income. It does not account for:
- One-off bonuses, overtime, or irregular income that might push you into a higher bracket mid-year
- Complex salary packaging arrangements or novated leases that affect reportable fringe benefits
- Investment income, rental income, or business income that changes your total repayment income
- Changes to indexation rates during the financial year (indexation is applied on 1 June each year)
- Voluntary payments you make throughout the year via myGov or your tax return
- Multiple HELP debts or other study and training loans (TSL, SFSS) which are calculated together
- Policy changes announced mid-year that alter thresholds or rates for future years
Always check your actual repayment obligation on your notice of assessment after lodging your tax return.
Edge cases and nuances
- Income just above threshold: Under the new marginal system for 2025-26 the old cliff effect is gone. If you earn $67,500, you pay 15% on the $500 above $67,000, which is $75, not 1% of the whole $67,500. Earning a dollar more no longer hits you with a disproportionate repayment. Some people still salary sacrifice to super to reduce repayment income, but the dollar-for-dollar cliff is no longer the driver.
- Parental leave and part-year work: If you take unpaid parental leave or work only part of the year, your annual income might fall below the threshold even though your usual salary is higher. Your employer will still withhold based on your pay cycle income, but you'll get a refund when you lodge your tax return.
- Working holiday makers and temporary residents: Australian residents for tax purposes with a HELP debt must make repayments. Non-residents don't make compulsory repayments through PAYG, but if you return to Australia or become a tax resident again, all the indexation that accrued still applies.
- Debt older than 11 months on 1 June: Indexation only applies to debt held for more than 11 months as at 1 June. A new HELP debt taken out in July won't be indexed the following June, giving you nearly two years before indexation hits.
- Combined couple income for home loans: Lenders assess your borrowing capacity after HELP repayments, even though the repayments are based on individual income. A couple each earning $70,000 with HELP debts will have less borrowing power than a couple without student debt on the same income.
