Two separate things shape a HECS-HELP debt each year, and it is easy to mix them up. Indexation decides how the outstanding balance grows, and repayments decide how much you actually pay back. Both moved in 2026. This report covers the indexation that hit balances on 1 June 2026 and how the 2026-27 marginal repayment system works, with the bands set out and a worked table of what people repay at different incomes.
Key takeaways
- Indexation of 2.8% was applied to loan balances on 1 June 2026, the lowest rate since 2021.
- Indexation is now the lower of CPI and WPI, and it is not interest.
- Compulsory repayments for 2026-27 start once repayment income passes $69,528.
- The system is marginal, so you repay a rate on income above each threshold, not on your whole income.
- Only the top band, from $186,051, uses a flat 10% of total repayment income.
How HELP debts were indexed in 2026
On 1 June each year the ATO applies indexation to study and training support loans. In 2026 the rate was 2.8%, the lowest since 2021. Indexation is not interest and it does not run day by day; it applies once a year to the part of your balance that has been unpaid for more than 11 months, which is why a voluntary payment made before 1 June reduces the amount that gets indexed.
The rule behind the rate changed recently. Indexation is now set to the lower of the Consumer Price Index (CPI) and the Wage Price Index (WPI), rather than CPI alone, so wage growth can cap the figure in years when prices rise faster. That is a separate mechanism from the repayment thresholds below, which the ATO indexes to average weekly earnings. The next indexation event is due on 1 June 2027, and its rate is not yet published because it depends on the December 2026 CPI and WPI figures.
The marginal repayment system
Since the 2025-26 income year, compulsory repayments use a marginal system that carries into 2026-27. Instead of one flat percentage on your whole income, you repay a rate only on the income above the minimum threshold, exactly like the income tax brackets. Earning one more dollar only ever adds the marginal rate on that dollar, so a small pay rise no longer lifts the rate on everything you earn. The old whole-income method could do that, turning a modest raise into a much larger repayment.
The 2026-27 repayment bands
The minimum repayment threshold for 2026-27 is $69,528. Below it there is no compulsory repayment. Above it the marginal bands apply, and only the top band uses a whole-income rate.
| Repayment income | Repayment on this income |
|---|---|
| $0 – $69,528 | Nil |
| $69,529 – $129,717 | 15c for each $1 over $69,528 |
| $129,718 – $186,050 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of total repayment income |
What you repay by income
The table below is computed from the 2026-27 bands for a straightforward wage earner. Someone on $95,000, for instance, repays $3,821, which is 15c on each dollar of the $25,472 they earn above the $69,528 threshold, not 15c on the whole $95,000.
| Repayment income | Compulsory repayment (2026-27) |
|---|---|
| $75,000 | $821 |
| $95,000 | $3,821 |
| $115,000 | $6,821 |
| $135,000 | $9,926 |
You can run your own figure on the HECS-HELP repayment calculator, which uses these exact 2026-27 bands.
What counts as income
Compulsory repayments are worked out on your repayment income, not your gross salary. For most wage earners repayment income is simply their taxable income. It can be higher if you have reportable fringe benefits, net investment or rental losses, salary-sacrificed super, or exempt foreign employment income, because those amounts are added back so the repayment cannot be reduced by packaging them away. The mechanics of thresholds, collection and repayment income are covered in full in the guide to how HECS-HELP repayments work, and the wider list of 2026 changes sits in our summary of what changed on 1 July 2026.
Frequently asked questions
Sources
All figures verified against the named document.
- ATO, Study and training support loans rates and repayment thresholds (the $69,528 minimum threshold and the 2026-27 marginal bands).
Last verified 25 July 2026.
