What is HECS-HELP?
HECS-HELP is the government loan scheme that pays for your university tuition fees. You repay the loan through the tax system once your income exceeds the compulsory repayment threshold. From 2025-26, Australia moved to a marginal repayment system — a significant change from the previous flat-percentage model.
The new marginal repayment system (2025-26)
Under the new system, repayments work similarly to income tax brackets. Instead of paying a flat percentage on your entire income when you cross a threshold, you pay progressive rates on income above each threshold.
| Repayment income | Rate | How it applies |
|---|---|---|
| $0 – $67,000 | 0% | No repayment |
| $67,001 – $125,000 | 15% | On income above $67,000 |
| $125,001 – $179,285 | 17% | $8,700 + 17% on income above $125,000 |
| $179,286+ | 10% | 10% of total income |
Why the new system is fairer
Under the old system, crossing a threshold meant your repayment rate jumped on your entire income — creating cliff edges where a $1 pay rise could cost hundreds in extra HECS repayments. The new marginal system eliminates these cliff edges. A person earning $68,000 now repays $150 (15% of $1,000 above threshold), compared to potentially $680 under the old system.
How HECS affects your pay
Your employer withholds estimated HECS repayments from each pay alongside income tax. The exact amount is calculated using ATO withholding schedules. At tax time, the ATO reconciles the actual repayment amount against what was withheld.
Calculate your HECS repayment
Use the HECS Calculator to see your exact compulsory repayment under the new marginal system.