Pay Off your HELP Debt Quicker

If you incur a HELP debt during your tertiary studies, by Salary Packaging Reportable Fringe Benefits you can reduce the amount of time to pay the debt whilst also improving your disposable income position.

 

How is the HELP Debt repayment calculated?

Under the current legislation, it is compulsory for you to repay your HELP debt once your “Repayment Income” level is above a minimum threshold, even if you are still studying.

Repayment Income is calculated using the following amounts from your tax return:

  • Taxable Income
  • Reportable Fringe Benefits
  • Total Net Investment Loss
  • Reportable Superannuation Contributions
  • Any Exempt Foreign Employment Income

The repayment thresholds change every year and the thresholds for the 2014/15 Financial Year are:

 

Repayment Income

Repayment Rate

< $53,345

Nil

$53,345 - $59,421

4.0%

$59,422 - $65,497

4.5%

$65,498 - $68,939

5.0%

$68,940 - $74,105

5.5%

$74,106 - $80,257

6.0%

$80,258 - $84,481

6.5%

$84,482 - $92,970

7.0%

$92,971 - $99,069

7.5%

> $99,069

8.0%

 

Therefore if your Repayment Income is $55,000, your compulsory HELP repayment will be: 

$55,000 x 4.0% = $2,200

Your Payroll office will deduct the compulsory HELP repayment from your after tax salary and pay it to the ATO on your behalf.

 

How does Salary Packaging help me?

The best way to show how Salary Packaging can improve your disposable income position and reduce the amount of time it will take to pay your HELP debt in full, is to show you an example based on your employer type.

If you work in the Public Health Sector, click here for your example.

If you work for a Public Benevolent Institution, click here for your example.