Graduates with a HELP debt now have more breathing room before compulsory repayments begin. From 1 July 2026, the minimum repayment income threshold rose to $69,528, up from $67,000 in 2025–26, according to the ATO's published rates.

It matters now because the new settings apply to income earned this financial year, with the 2026–27 repayment worked out when returns are lodged from July 2027. For many early-career workers, it means a smaller repayment, or none at all.

The new 2026–27 repayment bands at a glance

Since the 2025–26 income year, compulsory HELP repayments have been calculated on a marginal basis. Instead of applying a percentage to your whole income once you cross the threshold, the ATO charges a rate only on the income above it.

For 2026–27, the ATO lists four bands. Repayment income up to $69,528 attracts no compulsory repayment.

Between $69,529 and $129,717, the repayment is 15 cents for each dollar above $69,528.

Between $129,718 and $186,050, it is $9,028 plus 17 cents for each dollar above $129,717.

From $186,051, the calculation switches to 10 per cent of total repayment income.

In 2025–26, by comparison, the nil band ran to $67,000, the 15-cent band to $125,000, and the 17-cent band to $179,285, with 10 per cent of total income applying from $179,286.

Why the thresholds moved

The repayment thresholds are indexed each year, and the 2026–27 figures reflect that annual update.

This is separate from the indexation applied to the debt itself. On 1 June 2026, outstanding HELP balances were indexed by 2.8 per cent, down from 3.2 per cent in 2025, according to the ATO. Under the current rules, the debt indexation rate is the lower of the consumer price index or the wage price index.

In dollar terms, a hypothetical $20,000 balance would have had about $560 added at the June 2026 indexation, compared with $640 at last year's 3.2 per cent rate.

It also follows the one-off 20 per cent reduction in HELP debts, which was applied in late 2025 and backdated to 1 June 2025. The Prime Minister's office said more than 3 million people benefited, sharing in almost $16 billion, with a typical $27,600 debt falling by about $5,520.

Taken together, a lower balance, lower indexation and a higher repayment threshold mean the 2026–27 picture looks different from the one many graduates faced only two years ago.

Worked examples: what graduates may repay

The following examples are hypothetical. They assume repayment income is the same in both years and ignore other tax items.

A graduate on $68,000 would have faced a compulsory repayment of $150 in 2025–26, being 15 cents on the $1,000 above $67,000. In 2026–27 that same income sits below $69,528, so the compulsory repayment is nil.

A graduate on $80,000 would have repaid $1,950 in 2025–26 (15 per cent of $13,000). In 2026–27, the amount above the threshold is $10,472, giving a repayment of about $1,570.80. That is roughly $379 less.

Someone on $130,000 would have repaid $9,550 in 2025–26 ($8,700 plus 17 per cent of $5,000). In 2026–27, the figure is $9,028 plus 17 per cent of $283, or about $9,076, a saving of around $474.

In proportional terms, the biggest relief goes to people earning just above the old $67,000 threshold, some of whom now repay nothing.

At the very top, the change is smaller. A person with $190,000 of repayment income falls into the 10 per cent band in both years, so the compulsory repayment is $19,000 either way.

In reality, most people's income rises over time, so the actual change from year to year will depend on individual circumstances.

What counts as repayment income

The threshold is tested against repayment income, not simply your salary. According to the ATO, repayment income is taxable income, excluding any assessable first home super saver released amounts, plus reportable fringe benefits, total net investment losses, reportable super contributions and exempt foreign employment income.

That means salary packaging, salary sacrifice into super or a negatively geared investment property can lift repayment income above taxable income. A graduate whose payslip suggests they are under $69,528 could still have a compulsory repayment once those amounts are added back.

As a hypothetical example, a graduate with taxable income of $66,000 and $5,000 of reportable fringe benefits would have repayment income of $71,000. That would trigger a compulsory repayment of about $221 in 2026–27, even though taxable income sits below the threshold.

It also works the other way. Deductions that reduce taxable income can lower repayment income, as long as they are genuine and properly substantiated.

Withholding versus the final bill

Employers withhold extra tax from the pay of employees who tell them they have a study or training loan. That withholding is only an estimate.

The actual compulsory repayment is calculated by the ATO when a tax return is assessed, based on the full-year repayment income. Any shortfall is added to the tax bill, while excess withholding generally flows back as part of the refund.

This is one reason graduates with a second job, a side hustle or investment income are sometimes surprised at tax time. Each employer only sees part of the picture.

Voluntary repayments remain an option for those who want to reduce the balance faster. Whether that makes sense compared with other uses of the money, such as building savings or reducing higher-interest debt, depends on individual circumstances. A registered tax agent or financial adviser may help weigh up the trade-offs.

Key dates and what to watch

The 2025–26 settings still apply to tax returns being lodged now. Self-lodgers face a 31 October 2026 deadline, which falls on a Saturday this year. Under the ATO's general weekend rule, they can lodge on Monday 2 November without penalty.

The new $69,528 threshold applies to income earned from 1 July 2026 to 30 June 2027, with the compulsory repayment worked out when those returns are lodged from July 2027.

The next indexation of HELP balances is due on 1 June 2027, and new repayment thresholds for 2027–28 are expected to be published before that income year begins. Graduates close to a threshold may find it useful to check their myGov account and payslip settings early.