HECS Repayment Threshold – New And Updated

Each year students get mail directly through the Australian Tax Office regarding new changes to the HECS-HELP debt repayment rate. The HECS repayment threshold has been increased for the 2023-24 financial year. This is good news! Because people who needed to make compulsory payments in 2022-23 might not have to pay this year. Last year, anyone earning more than $48,361 had to make repayments. However, from July 2024 onwards, the threshold has risen to $51,549. It will change in 2025 so stay updated. Read further to calculate the HECS-HELP Repayment Threshold and why the Australian government changes every year.

What is HECS-HELP

It is a loan program, fully known as the Higher Education Loan Program (HELP) that assists students in Commonwealth-supported places with their university fee amounts. It was simply called “HECS”, but now it’s categorized as HELP. 

Instead of paying for your studies upfront, you can delay the payment until you start earning, which then becomes your HECS-HELP debt. This debt needs to be repaid as soon as your salary hits a specific limit. That is known as the HECS Repayment Threshold. It’s the minimum income level at which you need to start repaying your HECS debt. 

When your income falls below the set limit, you are not expected to make compulsory repayments. Once your income meets or exceeds this threshold, a portion of it will go towards repaying your HECS debt. The bigger your paycheck, the more you pay off. (See the table below to know what percentage of your salary will be for HECS Debt repayment)

HELP Repayment Thresholds For 2023-24

Hecs Repayment Threshold	Repayment rate
Below $51,550	Zero
$51,550 – $59,518	1%
$59,519 – $63,089	2%
$63,090 – $66,875	2.5%
$66,876 – $70,888	3%
$70,889 – $75,140	3.5%
$75,141 – $79,649	4%
$79,650 – $84,429	4.5%
$84,430 – $89,494	5%
$89,495 – $94,865	5.5%
$94,866 – $100,557	6%
$100,558 – $106,590	6.5%
$106,591 – $112,985	7%
$112,986 – $119,764	7.5%
$119,765 – $126,950	8%
$126,951 – $134,568	8.5%
$134,569 – $142,642	9%
$142,643 – $151,200	9.5%
$151,201 and above	10%

The next official update will be on 1 June 2025. However, by using the current HELP repayment thresholds and rates, we can predict the HECS repayment threshold for the 2024-2025 income year. 

Based on current rules, we expect the rules for 2025 will be similar. The thresholds and rates will likely be adjusted a bit for inflation and the economy. Since the government’s goal is to make repayment fair and manageable for students after they graduate, you can expect these changes:

There is a calculator online for calculating your HECS-HELP Debt but if you want to understand it, read this guide. For starters, repaying your HECS-HELP debt begins once you earn above a specific income level. The repayment amount is a percentage of your income and increases as your income rises. Each year, the Australian Tax Office (ATO) calculates your compulsory repayment and includes it in your tax notice of assessment.

If you have a HECS-HELP debt, inform your employer so they can deduct repayments from your salary. Because the loan rate to repay is the part (%) of your earnings that gets taken out of your paycheck. Instead of an interest rate, the government uses an indexation rate. 

Indexation is a fee applied once a year, on June 1, affecting the overall debt amount. This is linked to the national Consumer Price Index (CPI) to keep debts aligned with inflation and the cost of living. 

For instance, starting June 1, 2024, the indexation rate turned into 4.7%, meaning your debt will increase by this percentage. (In 2023 it was 7.1%)

HECS-HELP repayment rates change every financial year. This adjustment is standard and not unusual. But many students don’t know that it changes that’s why keep yourself informed! Here’s the pros and cons of this Income-Driven Repayment Plan:

What’s Good

The new first threshold for 2023-24 means some individuals won’t need to make a compulsory repayment. For those with cash flow issues, this could save them less than $500 annually. 

Also, if your income in 2023-24 is the same as 2022-23, your HELP repayment rate might go down from 3.5% to 3%. You can choose to make a voluntary payment this year, but you don’t have to.

What’s Bad

The downside is that more HELP debt will continue to be indexed (increased) over time. This means that this debt will continue to be indexed at a high rate, maybe for another year, even as inflation appears to be decreasing. 

Paying less now could mean you take longer to fully repay your HELP debt. This could result in you paying more in total over the lifetime of the loan.

People who are earning overseas with HECS/HELP debt must tell the Tax Office within 7 days of leaving Australia. You can do this online through myGov. Do this if you plan to move out of the country for 6 months plus 3 days or more in 12 months

Just know that even if you move overseas, you still have the same repayment obligations as people living in Australia. Your loan account will still be active and the amount will continue to increase each year until it is fully repaid. 

You must update your contact details in myGov and report your worldwide income if it is more than 25% of the minimum repayment amount for that year. You will then need to make a compulsory repayment or pay an overseas levy towards your loan.