If you’ve already taken up a job offer – congratulations to you , and if you haven’t as yet…just keep looking – and take any experience you can get!
If you have just completed your degree, then it is highly likely that you also have a HELP debt – but what does this mean?
HELP is the Higher Education Loan Program which was introduced to assist students in paying for their University tuition. While no interest is charged on the loan, the amount financed is subject to an adjustment to reflect the Consumer Price Index (CPI) on an annual basis (1 June each year).
The great thing about HELP is that you only start to repay the amount you owe once your taxable income reaches the relevant threshold (you can see the current rates here)
One thing that often confuses taxpayers is how the repayments are actually made – when completing your Tax File Number (TFN) Declaration, you should notify your employer that you have a HELP debt. Your employer is then required to withhold an additional amount of PAYG Withholding to cover your expected HELP debt repayment.
However – while this amount withheld is combined with your other PAYG Withholding and remitted to the Australian Taxation Office (ATO) – your HELP debt will only be reduced at the time your tax return is lodged and assessed – you’ll see what I mean when you read your Notice of Assessment from the ATO (but if it’s still confusing, please ask your accountant to explain!)
Employers should also ensure they are aware of the relevant repayment thresholds and check that their payroll procedures and software are up to date to calculate any amounts correctly!