Salary Packaging HECS/HELP
Study up on salary packaging voluntary HECS-HELP repayments
Who can package HECS/HELP repayments?
This salary packaging option is available for the following industries:
What is the HECS-HELP repayments salary packaging benefit?
Do you ever think to yourself – how the heck am I going to pay off my HECS-HELP debt?
Although compulsory repayments for HELP (Higher Education Loan Program) or HECS (Higher Education Contribution Scheme) are deducted from your income once you hit the repayment threshold, many people choose to make voluntary contributions.
If you are wanting to make voluntary contributions and pay off your debt faster, we have some good news! You may be able to salary package voluntary contributions towards your HECS-HELP debt.
How much can I package in voluntary HECS-HELP contributions?
Voluntary contributions would come under the Living Expenses benefit as part of ATO-approved salary packaging.
Employees in the healthcare sector can package $9,010 towards payments considered Living Expenses. Those in the charity or non-profit sector can package $15,900 of their salary, pre-tax.
How does salary packaging HECS-HELP voluntary repayments work?
Salary packaging can seem overwhelming, so we’ll try to break it down.
Let’s say you want to make an annual voluntary contribution of $500. If you get paid monthly, you could instruct your employer to send 10 x $50 payments to Maxxia before tax is taken out. If you have no other benefits, the remainder of your pay is then taxed and paid into your bank account, to spend how you please.
You can either submit a claim to Maxxia for reimbursement or set up regular reimbursements every month.
Important things to know
Although salary packaging can reduce your taxable income, it can increase the grossed-up value of your salary. This is referred to as your ‘adjusted taxable income’ and your benefits are known as ‘Reportable Fringe Benefits’.
The ATO uses your adjusted taxable income to work out how much you should be paying each year in HECS-HELP repayments, as well as other income-tested government benefits.
You can read more about how HECS-HELP affects salary packaging here.
Salary packaging may affect the amount you need to make in compulsory HECS-HELP contributions, so please speak to your employer if you need to put more money aside for your HECS-HELP repayments.
We recommend seeking financial advice before making any financial decisions.
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