How will my HECS-HELP debt impact my salary packaging?
If you have a HELP debt, you may need to adjust your HELP repayments when you salary package. This is because your HELP repayments are calculated based on your ‘HELP Repayment Income’ (HRI). In most cases, this will be your annual taxable income plus your total reportable fringe benefits amount shown on your PAYG Payment Summary.
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'.
How your adjusted taxable income impacts HECS-HELP repayments
The ATO assesses you on your 'adjusted taxable income' when working out how much you should pay in HELP or HECS repayments.
Your adjusted taxable income equals your salary plus the gross value of your fringe benefits (e.g. $40,900 + $17,000 = $57,900).
Before you start...
Before you start salary packaging, please tell your payroll department to take additional HELP or HECS repayments from your salary.
You should seek financial advice if you're unsure.