Salary packaging with a HELP/HECS debt
You can benefit from salary packaging even if you have a HELP (Higher Education Loan Program) or HECS (Higher Education Contribution Scheme) debt.
Understanding your 'adjusted taxable income'
Although salary packaging can reduce your taxable income, it can increase the gross value of your salary. This is referred to as your 'adjusted taxable income'. So, your adjusted taxable income equals your salary plus the gross value of your fringe benefits (e.g. $40,900 + $17,000 = $57,900)
How your adjusted taxable income impacts HELP and HECS repayments
The ATO assesses you on your 'adjusted taxable income' when working out how much you should pay in HELP or HECS repayments. Therefore, if your gross salary increases, you may need to increase your regular HELP or HECS repayments. Otherwise you may end up with a bill at tax time.
A salary packaging and HELP/HECS debt example:
Potential annual benefit for a health employee*
| Salary | Take home pay without salary packaging ie. $9,010 on living expenses and $2,650 on meal entertainment after-tax | Take home pay with salary packaging ie. $9,010 on living expenses and $2,650 on meal entertainment before-tax | Benefit (annual) after repaying the HELP repayment |
|---|---|---|---|
| $60,000 | $38,352 | $41,514 | $3,162* |
Potential annual benefit for a charity employee^
| Salary | Take home pay without salary packaging ie. $15,900 on living expenses and $2,650 on meal entertainment after-tax | Take home pay with salary packaging ie. $15,900 on living expenses and $2,650 on meal entertainment before-tax | Benefit (annual) after repaying the HELP repayment |
|---|---|---|---|
| $60,000 | $31,462 | $35,398 | $3,936^ |
What are the current HELP repayment rates?
HECS/HELP repayment threshold and rates for 2025-2026:
| HECS/HELP repayment income (HRI) | Repayment % rate |
|---|---|
|
Below $67,000 |
Nil |
|
$67,001 – $125,000 |
15c for each $1 over $67,000 |
|
$125,001 – $179,285 |
$8,700 plus 17c for each $1 over $125,000 |
|
$179,286 and over |
10% of your total repayment income |
HRI = Taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income.
Before you start…
Before you start salary packaging, please tell your payroll department to take additional HELP or HECS repayments from your salary. Please also seek financial or taxation advice if you're unsure.
HEALTH
*Salary Packaging: The estimated potential tax benefit is based on an eligible employee with an annual salary of $60,000, salary packaging the full $9,010 per annum limit and claiming $2,650 in venue hire and meal entertainment expenses. PAYG tax rates effective 1 July 2024 have been used. HELP repayments are based on 2025-2026 HELP repayment thresholds and rates. An average salary packaging administration fee has been used. The actual administration fee that applies to you may vary depending on your employer. Estimated annual benefit based on the assumption that an employee does not have any accumulated Financial Supplement debt. Your disposable income will vary based on your income and personal circumstances. Compulsory HELP repayments commence once your adjusted taxable income is above $67,000.
CHARITY
^Salary Packaging:The estimated potential tax benefit is based on an eligible employee with an annual salary of $60,000, salary packaging the full $15,900 per annum limit and claiming $2,650 in venue hire and meal entertainment expenses. PAYG tax rates effective 1 July 2024 have been used. HELP repayments are based on 2025-2026 HELP repayment thresholds and rates. An average salary packaging administration fee has been used. The actual administration fee that applies to you may vary depending on your employer. Estimated annual benefit based on the assumption that an employee does not have any accumulated Financial Supplement debt. Your disposable income will vary based on your income and personal circumstances. Compulsory HELP repayments commence once your adjusted taxable income is above $67,000.
Things you need to know: This general information doesn’t take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax or financial advice. Conditions and fees apply, and you should consider if they are acceptable before you accept any arrangements with RemServ, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your employer’s approval. RemServ may pay and/or receive commissions in connection with its services.
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