Your Higher Education Loan Program (HELP) debt is repaid through the tax system.
The Australian Taxation Office (ATO) is responsible for managing HELP debt repayments.
You can make voluntary repayments to reduce your HELP debt at any time. You must make compulsory repayments towards your HELP debt when your annual income is above the compulsory repayment threshold amount.
Proposed changes to HELP debt
The Government will reduce HELP debts by 20% and change the repayment system.
What's on this page
How is a HELP debt repaid?
There are two repayment methods for your HELP debt:
| Compulsory repayments | Voluntary repayments |
|---|---|
|
|
For example
Alex has a part-time job while studying. His employer withholds an amount each fortnightly pay cycle to go towards his compulsory repayment.
At the end of the financial year, Alex lodges his tax return.
As his annual income for the financial year was $19,600, he does not need to make a compulsory repayment for his HELP debt as his income was below the compulsory repayment threshold.
Alex will have the fortnightly amounts deducted by his employer returned to him by the ATO as part of his tax return.
How much will my compulsory repayment be?
The more you earn, the higher your compulsory repayment will be.
When you complete your tax return, the ATO will calculate your income for the year and tell you how much your compulsory repayment is.
| 2024-2025 Repayment threshold | Repayment % rate |
|---|---|
| Below $54,435 | Nil |
| $54,435 - $62,850 | 1.0% |
| $62,851 - $66,620 | 2.0% |
| $66,621 - $70,618 | 2.5% |
| $70,619 - $74,855 | 3.0% |
| $74,856 - $79,346 | 3.5% |
| $79,347 - $84,107 | 4.0% |
| $84,108 - $89,154 | 4.5% |
| $89,155 - $94,503 | 5.0% |
| $94,504 - $100,174 | 5.5% |
| $100,175 - $106,185 | 6.0% |
| $106,186 - $112,556 | 6.5% |
| $112,557 - $119,309 | 7.0% |
| $119,310 - $126,467 | 7.5% |
| $126,468 - $134,056 | 8.0% |
| $134,057 - $142,100 | 8.5% |
| $142,101 - $150,626 | 9.0% |
| $150,627 - $159,663 | 9.5% |
| $159,664 and above | 10.0% |
For example
Zichen has commenced full-time work as a first-year solicitor, earning an annual salary of $69,300.
His compulsory repayment will be $1,732.50 which is 2.5% of his salary.
How is your annual income calculated for the purpose of the compulsory repayment?
Your annual income before tax is used to calculate your compulsory repayment.
However, it is not only the income from your employment that is used to calculate your compulsory repayment. It also includes income from other sources, such as from any investments. The Australian Taxation Office (ATO) calls this your repayment income.
More information on how your repayment income is calculated is available on the ATO website.
What happens if there's a gap between how much my employer withholds and my compulsory repayment amount?
If there is a gap between how much your employer has withheld from your regular pay and sent to the ATO, and what your compulsory repayment is assessed to be, you will need to pay the ‘gap’ amount to the ATO.
If your employer has withheld too much because your compulsory repayment is assessed as a lower amount, you will have the extra returned to you from the ATO as part of your income tax return.
Voluntary repayments do not reduce or offset your compulsory repayment
Voluntary repayments do not count towards or reduce any compulsory repayment you are required to make.
Voluntary repayments are additional repayments over and above your compulsory repayment.
How does my employer(s) know how much to withhold?
Your employer will withhold and send to the ATO a percentage of your regular pay based on the annual repayment threshold and repayment table.
You need to notify your employer you wish them to withhold amounts from your regular pay and then authorise them to do this.
If you have more than one employer, you need to let each employer know to withhold amounts to go towards your HELP debt compulsory repayment.
More information on how to notify your employer is available on the ATO website.
Why is my HELP debt growing?
HELP debts are indexed by the ATO each year. Indexation is added to your HELP debt to reflect changes in the cost of living.
Like interest, indexation means your debt grows over time.
This means the amount you repay in total is likely to be more than the original amount of the loan.
Useful links and resources
For more information on the government’s proposed changes to indexation and how indexation will impact your HELP debt go to loan increases and indexation.
Why aren’t my pay as you go (PAYG) withheld amounts showing against my HELP debt?
Your employer might be deducting amounts from your pay towards your compulsory repayment. However, the ATO can only determine whether your income is above the compulsory repayment threshold when your income tax return for that year is lodged.
When you do your tax return, the ATO will calculate the repayment you owe and use the amounts deducted by your employer to cover this repayment.
How does my employer(s) know how much to withhold?
Your employer will withhold and send to the ATO a percentage of your regular pay based on the annual repayment threshold and repayment table.
You need to notify your employer you wish them to withhold amounts from your regular pay and then authorise them to do this.
If you have more than one employer, you need to let each employer know to withhold amounts to go towards your HELP debt compulsory repayment.
More information on how to notify your employer is available on the ATO website.
Does anyone inherit my HELP debt?
A HELP debt is linked to an individual through their tax file number, so the responsibility of the debt is not transferred to another person when they die.
The executor of a deceased person’s estate will submit all outstanding income tax returns on behalf of a deceased person up to the date of the person’s death.
The ATO will calculate the amount of a compulsory repayment for that financial year.
The remainder of the HELP debt is cancelled upon their death.
How do loan repayments impact my available HELP balance?
There is a cap on how much you can borrow from the Australian Government through a HELP loan. This cap is called your HELP loan limit.
Your available HELP balance is the amount you are still able to borrow under the HELP loan limit. The HELP loan limit is renewable.
You can top up your available HELP balance by making repayments on your HELP debt.
This will allow you to borrow that amount again in the future by increasing your available HELP balance.
For example
Aziza has a HELP loan to pay her student contribution amount for the first semester of her economics degree and has borrowed $8,120.
Aziza's HELP Loan limit of $121,844 is reduced by $8,120. Her available HELP balance is $113,724.
Aziza made a voluntary repayment of $2,000 at the end of her first semester which has increased the amount she can borrow in the future to $115,724.