HECS HELP Repayments
Author: Duncan Warnock CPA | September, 2015
What the HECS?
'What HECS HELP Repayments do I have to make based on my income?' As an individual tax return specialist here in the inner west of Melbourne this is a common question that we often hear from customers in Maribyrnong, Ascot Vale, West Footscray & Yarraville . The income threshold and the percentage of your income you need to repay usually changes each year. A wage earners expected tax refund can quickly evaporate if enough tax has not been withheld from your wage during the year because the required HECS HELP repayment has not been correctly calculated.
For the current tax year ending June 2016 no HECS HELP repayments are required if your 'repayment income'* is below $54,126. This threshold has increased from $53,345 for the 2015 tax year.
| Repayment Rate | 2014-15 Repayment Income threshold | 2015-16 Repayment Income threshold |
|---|---|---|
| Nil | Below $53,345 | Below $54,126 |
|
4.0% |
$53,345 to $59,421 | $54,126 to $60,292 |
| 4.5% | $59,422 to $65,497 | $60,293 to $66,456 |
| 5.0% | $65,498 to $68,939 | $66,457 to $69,949 |
| 5.5% | $68,940 to $74,105 | $69,950 to $75,190 |
| 6.0% | $74,106 to $80,257 | $75,191 to $81,432 |
| 6.5% | $80,258 to $84,481 | $81,433 to $85,718 |
| 7.0% | $84,482 to $92,970 | $85,719 to $94,331 |
| 7.5% | $92,971 to $99,069 | $94,332 to $100,519 |
| 8.0% | $99,070 and above | $100,520 and above |
The following table illustrates how much HECS HELP repayments would be typically required for the 2015 tax year for an individual taxpayer. It also calculates illustrates indicative income tax payable and medicare levy based on assumptions such as i) accumulated HECS HELP debt of $20,000, ii) the taxpayer is not entitled to any medicare levy education and iii) is not liable for any medicare levy surcharge.
| 2015 Taxable Income | HECS HELP Repayment | Income Tax payable (excluding HECS HELP) | 2% Medicare Levy | TOTAL tax payable including HECS HELP and Medicare Levy |
|---|---|---|---|---|
| $50,000 | $0 | $7,547 |
$1,000 |
$8,547 |
| $60,000 | $2,700 | $10,947 | $1,200 | $14,847 |
| $70,000 | $3,850 | $14,297 | $1,400 | $19,547 |
| $80,000 | $4,800 | $17,457 | $1,600 | $23,497 |
| $90,000 | $6,300 | $21,247 | $1,800 | $29,347 |
| $100,000 | $8,000 | $24,947 | $2,000 | $34,947 |
* NOTE: REPAYMENT INCOME is calculated as 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.
For further assistance with the preparation of a Tax Return including HECS HELP repayments, contact us to arrange a meeting with Duncan Warnock CPA from the Warnock Accounting Maribyrnong office.