The Australian Government’s Universities Accord (Cutting Student Debt by 20 per cent) Bill 2025 has passed Parliament, these changes apply to wages payments from 24th September. New tax scales are being rolled out in Xero now.
The minimum repayment threshold will change from $56,156 to $67,000 in 2025-26. This change will also introduce a system where HECS/HELP repayments are calculated only on the income above the new $67,000 threshold rather than repayments being based on total annual income.
For many of your employees, this will mean a smaller compulsory repayment is taken out of their pay (or none at all). This translates to more money in their hands – you may need to update scheduled bank transfers.
As the legislation has been back dated to 1st July 2025, employees who have had tax withheld using the old rates may receive a refund when they complete their 2026 tax return.
Read more here: https://www.education.gov.au/higher-education-loan-program/making-help-and-student-loan-repayments-fairer
https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new
