HELP Repayments Glow Up 2025–26: New Rules & Rates Explained

The idea of going to uni and happily slapping your tuition fees on a HELP loan felt like the ultimate “future me” problem. And now here you are — future you — with a grown-up job, a decent salary, and a tax return full of adult decisions.

And guess what? HELP repayments just got a glow-up. The rules changed from 1 July 2025, and we’re here to decode the fine print without putting you to sleep.

💸 So... When Do HELP Repayments Start?

From 1 July 2025, you’ll only need to make a compulsory HELP repayment if your repayment income is over $67,000.

If you're used to the older threshold ($54,435 in 2024–25), this is a very welcome jump. It means fewer people will need to repay, and those who do? You’ll likely pay less thanks to...

📊 The New Marginal Repayment System (It’s Actually Fair Now)

Instead of charging a flat percentage of your entire repayment income. Let's hold up here and explain what repayment income actually is:

• Your taxable income (obvs)

• Net investment losses (yes, even your ‘sure thing’ crypto crash)

• Reportable fringe benefits (hello company car and ‘free’ gym)

• Reportable super contributions (those salary-sacrificed extras)

• Exempt foreign income (if you’ve done a sneaky stint abroad)

And back to HELP ... it now uses a tiered marginal rate system, just like regular tax. So, you only repay based on the income above each threshold.

Here’s the official breakdown for 2025–26:

📋 Table 1: 2025–26 HELP Repayment Thresholds and Rates

Repayment Income (RI)	Repayment Amount
$0 – $67,000	Nil
$67,001 – $125,000	15c for each $1 over $67,000
$125,001 – $179,285	$8,700 plus 17c for each $1 over $125,000
$179,286 and over	10% of your total repayment income

🧠 Real-World Example: Grace

Grace earns $80,000 in the 2025–26 income year and has a HELP debt.

• She’s in the $67,001–$125,000 bracket

  • She only pays 15% on the income over $67,000

  • 👉 $80,000 − $67,000 = $13,000

  • 👉 $13,000 × 15% = $1,950

💡 Under the old system, she would’ve paid $2,800 (3.5% of her total income). New system savings: $850 🥳

💡 Higher Income Example

If Grace earned $130,000, she’d land in the second tier:

• Flat $8,700 (for the first $125,000 bracket)

• $5,000 over the threshold × 17% = $850

• Total repayment = $9,550

Still less than 10% of her total income ($13,000), so she’s still winning. At $179,286+, you pay a flat 10% of your full income, but not a cent more.

💰 How Are Repayments Made?

When you tick the “I have a HELP debt” box on your employment paperwork, your boss will withhold extra tax from your pay to cover your estimated loan repayment.

BUT here’s the kicker:

The withheld tax doesn’t go to your HELP loan immediately. It’s held by the ATO and applied after you lodge your tax return.

If too much was withheld? You might get some of it back as a refund. 😍

💸 Voluntary Repayments — Still a Thing

You can make a voluntary repayment anytime through myGov, and it’ll reduce your loan balance. There’s no longer a discount, but it’s still a smart move if you want to reduce indexation (we’ll get to that spicy topic next).

💡 Top Tip: Make voluntary repayments before 1 June each year to shrink the balance that gets indexed.

📈 Indexation: Still Here, But Softer

HELP debts aren’t technically “interest-bearing,” but they do get indexed to inflation every year on 1 June.

Thanks to new laws, the indexation rate is now capped at the lower of:

• The Consumer Price Index (CPI)

• The Wage Price Index (WPI)

For 1 June 2025, the CPI was lower, so:

✅ Indexation rate = 3.2%

Example:

If your loan was $30,000, then:

$30,000 × 3.2% = $960 added to your debt

Under the old system (WPI of 4.1%), it would’ve been $1,230, so yes, this cap is saving people hundreds. 🙌

🎁 BONUS ROUND: 20% HELP Loan Reduction – Yes, Really!

Here’s something you don’t hear every day: the government just reduced your debt.

✅ If you had a HELP or other eligible study loan on 1 June 2025, you’ll receive a 20% reduction to your balance.

How it works:

• It’s automatic — no need to apply

• It applies to your balance before indexation

• Indexation is recalculated based on your reduced loan

• If you overpaid, you may even get a refund

Reductions will be rolled out by the end of 2025, with more complex cases processed in early 2026.

💡 You can estimate your new balance using the HELP debt reduction and repayment estimator.

✈️ Moved Overseas? You’re Not Off the Hook

If you’ve gone full expat but still have a HELP debt, surprise! You’re still expected to report your worldwide income and make repayments if you earn above the threshold.

There’s no escape. Just international tax responsibility. Check out the ATO’s overseas HELP info for the fine print.

🧠 TL;DR: Your 2025–26 HELP Cheat Sheet

✅ Compulsory repayments start at $67,000 (up from $54,435)

✅ New marginal repayment system means smaller repayments for most

✅ 3.2% indexation in 2025 (not 4.1%!)

✅ 20% debt reduction applied to all HELP balances as at 1 June 2025

✅ Refunds possible if too much tax was withheld

✅ Overseas? Still gotta pay if you’re earning above the threshold

✅ Voluntary repayments can reduce your indexation, still worth considering

Still HELPless? Don’t Worry, We’re on It.

Student loans can be confusing, frustrating, and about as exciting as a double lecture on tax law (unless you're us, then it's a party 🎉). If you’re not sure what this means for your loan, tax return, refund, or future goals, our team is ready to break it down and help you make smart moves so feel free to contact us.

Disclaimer: This blog is general in nature and doesn’t consider your individual circumstances. Always seek personalised advice from a qualified professional before making financial decisions.