2025-26 repayment thresholds and rates
From 1 July 2025 the compulsory repayment threshold is $67,000, up from $54,435 the year before. Above it, you repay a marginal rate on each slice of income — not one flat rate on the whole lot.
| Repayment income | Compulsory repayment |
|---|---|
| Up to $67,000 | Nil |
| $67,001 – $125,000 | 15c for each $1 over $67,000 |
| $125,001 – $179,285 | $8,700 + 17c for each $1 over $125,000 |
| $179,286 and above | 10% of total repayment income |
Enter your income in the HECS calculator to apply these rates instantly, and add your debt to project a payoff date.
What you'd repay at different incomes
| Repayment income | Repayment | Effective rate |
|---|---|---|
| $67,000 | $0 | 0.0% |
| $80,000 | $1,950 | 2.4% |
| $90,000 | $3,450 | 3.8% |
| $110,000 | $6,450 | 5.9% |
| $130,000 | $9,550 | 7.3% |
| $160,000 | $14,650 | 9.2% |
| $200,000 | $20,000 | 10.0% |
Old system vs new marginal system
Under the pre-2025 rules, crossing a threshold applied a single rate to your entire income — so a $1 pay rise could trigger hundreds of dollars in extra repayments. The new marginal system removes that cliff: a pay rise only ever adds the marginal rate on the extra dollars, exactly like income tax.
What about 2026-27?
The threshold is indexed each year. For 2026-27 the first threshold is expected to rise to around $69,528, with the bands adjusted accordingly. We'll update the calculator when the ATO confirms the 2026-27 figures. For now the tool uses the current, legislated 2025-26 rates.
Related
Frequently asked questions
What is the HECS repayment threshold for 2025-26?
$67,000 of repayment income. Below it there is no compulsory repayment; above it, only the income above $67,000 is used under the marginal system.
How much do I repay on $90,000?
($90,000 − $67,000) × 15% = $3,450 for the year, about 3.8% of your income.
Does a pay rise still trigger a big jump?
No. Under the marginal system a pay rise only adds the marginal rate on the extra income, so there is no longer a repayment cliff.