HECS repayment thresholds are indexed each year in line with average weekly earnings. Here is what moved between 2025-26 and 2026-27:
| Boundary | 2025-26 | 2026-27 | Rise | Rise % |
|---|---|---|---|---|
| Nil threshold | $67,000 | $69,528 | +$2,528 | 3.77% |
| Top of the 15c band | $125,000 | $129,717 | +$4,717 | 3.77% |
| Whole-of-income point | $179,286 | $186,051 | +$6,765 | 3.77% |
Because every boundary moved up, the same income now sits lower in the bands than it did last year — which means a smaller repayment.
What that is worth, in dollars, at each income:
| Repayment income | Under 2025-26 rules | Under 2026-27 rules | Difference |
|---|---|---|---|
| $70,000 | $450 | $71 | −$379 |
| $75,000 | $1,200 | $821 | −$379 |
| $80,000 | $1,950 | $1,571 | −$379 |
| $90,000 | $3,450 | $3,071 | −$379 |
| $100,000 | $4,950 | $4,571 | −$379 |
| $110,000 | $6,450 | $6,071 | −$379 |
| $125,000 | $8,700 | $8,321 | −$379 |
| $130,000 | $9,550 | $9,076 | −$474 |
| $150,000 | $12,950 | $12,476 | −$474 |
| $170,000 | $16,350 | $15,876 | −$474 |
| $186,051 | $18,605 | $18,605 | No change |
| $200,000 | $20,000 | $20,000 | No change |
Reduction in the compulsory repayment on the same income, 2025-26 rules vs 2026-27 rules.
The biggest single saving in this range is $474, at $130,000. Above the whole-of-income point the repayment is 10% of total income in both years, so the saving disappears — at $200,000 you repay $20,000 either way.
The repayment thresholds are not fixed in law at a dollar figure — they are re-set each year in line with average weekly earnings. The intent is that the threshold tracks what a typical wage does, so the same relative position in the income distribution attracts the same treatment year after year.
The practical effect is a quiet, automatic adjustment. If your pay rises by exactly the same percentage as the thresholds, your repayment rises in step and your position is unchanged in real terms. If your pay is flat while the thresholds rise, you repay less. If your pay outruns the thresholds, you repay more.
That is why the table above shows a saving at every income below the whole-of-income point: it is holding your income still while the boundaries move underneath you. Almost nobody experiences it that way in real life, which is the source of the confusion in the next section.
It is also worth separating this from the other indexation in the HECS system. The thresholds move with average weekly earnings on 1 July; the debt moves with the lower of CPI and WPI on 1 June. Two different dates, two different series, two different directions of effect — the debt side is priced out here. Most calculators model neither and hold both constant, which is why their debt-free dates tend to be optimistic.
The most common reaction to a table like this is "then why is more coming out of my pay?" Usually because two things moved at once:
You can check your own figure both ways in the repayment calculator, which carries both years' thresholds.
There is a second reason the numbers in your pay and the numbers on your assessment disagree, and this year it is unusually large.
Your employer does not calculate your compulsory repayment. They withhold an estimate each pay using the ATO's withholding schedules, and the real figure — the one in the table above — is only worked out when your return is assessed. The two are reconciled then, and any excess comes back to you.
For 2025-26 the gap was systematic rather than random. The marginal repayment system started on 1 July 2025, but the matching payroll withholding tables were not in place until 24 September 2025. Pays between those dates were withheld under the older, heavier schedules. If you were working across that window, more was taken from you than the marginal rules ever required, and the difference is refunded at assessment. The mechanics, and how to estimate yours, are here.
For 2026-27 the withholding tables and the thresholds start the year aligned, so that particular distortion should not repeat. The ordinary gap remains, though: withholding is a per-pay estimate against an annual, whole-of-year formula, and things like a mid-year pay rise, unpaid leave, a bonus or a second job will still leave the two out of step in either direction.
A voluntary repayment made during the year does not reduce the compulsory amount assessed for that year. It reduces the balance — and therefore future indexation — but the figure in the table above is still assessed and still collected.
Every figure on this page is computed at build time by the same engine that powers the calculators on this site — nothing is typed in by hand, so the tables cannot drift away from the tools. The engine is checked against the ATO's published thresholds by a golden test suite that fails the build if any figure moves unexpectedly.
HECS repayment at every income — the full 2026-27 table