HECS-HELP and Australian tax: everything you need to know

Do you have a student loan? Are you worried that you might never pay it off? You’re not alone – this year, with loans due to be indexed at an eye-watering 4.1%, many ex-students might find that the amount they pay off is less than the amount added in indexation! So, how exactly are the amounts of repayments calculated? Compulsory loan repayments are made through the tax system when your income reaches a certain threshold (currently $51,550 for the 2023-24 financial year). However, it is possible to also make voluntary repayments at any time regardless of income. When your income exceeds this threshold, a compulsory repayment of at least 1% of your income is raised in your income tax assessment. The percentage increases as your income increases. Rates for 2023-24 are as follows: Repayment Income Repayment % rate Below $51,550 Nil $51,550 – $59,518 1.00% $59,519 – $63,089 2.00% $63,090 – $66,875 2.50% $66,876 – $70,888 3.00% $70,889 – $75,140 3.50% $75,141 – $79,649 4.00% $79,650 – $84,429 4.50% $84,430 – $89,494 5.00% $89,495 – $94,865 5.50% $94,866 – $100,557 6.00% $100,558 – $106,590 6.50% $106,591 – $112,985 7.00% $112,986 – $119,764 7.50% $119,765 – $126,950 8.00% $126,951 – $134,568 8.50% $134,569 – $142,642 9.00% $142,643 – $151,200 9.50% $151,201 and above 10.00% What is HELP Repayment Income (HRI)? Your repayment income is different to your taxable income. It is calculated as: your taxable income for an income year, plus your total net investment losses, plus any total reportable fringe benefit amounts shown on your… Read More