Tax Return:: 2022FY Thresholds and Rates for Study and Training Loan Repayment

Hello, this is your tax accountant, P&C Tax Professionals.

Today’s blog post is specially for those of you who have taken out a study and/or training loan to complete your studies in Australia. Without further ado, let’s dive right into the nitty gritty of today’s discussion.

Many of the study and training loans you might have heard of are subject to a single set of thresholds and rates. Basically, if you hold any of the study/training loans listed below, it is compulsory for you to repay your debt once you exceed a certain threshold:

> Higher Education Loan Program (HELP)

> VET Student Loan (VET)

> Student Financial Supplement Scheme (SFSS)

> Student Start-up Loan (SSL)

> ABSTUDY Student Start-up Loan (ABSTUDY SSL)

> Trade Support Loan (TSL)

<Compulsory Repayment>

It would only make sense for your compulsory repayment rate to increase the more you earn in a given financial year. The important thing to note here is that your compulsory repayment is solely based on your own income and not the income of either your parents or your spouse.

However, the good news is that you are not required to make a compulsory repayment if the following applies to you:

You have a spouse and/or dependents and because of a low family income you:

> are able to receive a reduction of the Medicare levy

> are not required to pay the Medicare levy.

<Notifying your employer>

It is compulsory for you as the employee to notify your employer of any study or training support loans that you may have. This is because under the pay as you go (PAYG) withholding system, if you do happen to have a study loan, your employer must withhold an additional amount from your wage in order to account for your compulsory repayment.

Advising your employer can be done relatively easily by simply marking the relevant box on the form which you must fill out depending on your individual circumstance:

> If you are just beginning your new job à fill out the Tax file number declaration (NAT 3092) form and make sure to state which type of loan you hold.

> If you are currently working and are being paid à fill out the Withholding declaration (NAT 3093) form and make sure to state which type of loan you hold.

> If you have fully paid off your loan à fill out a new Withholding declaration (NAT 3093) form and make sure to state that you no longer have a loan to pay off.

Most of the time, these forms can be obtained directly from your employer, but you can also find a copy of them on the ATO website through the link provided below.

ATO Link (TFN Declaration Form): https://www.ato.gov.au/Forms/TFN-declaration/

ATO Link (Withholding Declaration Form): https://www.ato.gov.au/Forms/Withholding-declaration/

Please make reference of the repayment income thresholds and the corresponding repayment rate for the 2022 financial year.

2021-2022FY Repayment Income Thresholds and Repayment Rates

The Repayment Income (RI) is calculated as follows:

RI = Your taxable income + total net investment loss (including any net rental losses) + total reportable fringe benefits amounts + reportable super contributions + exempt foreign employment income

Like always, if you have any questions regarding your tax and super, please do not hesitate to contact us through our Official Facebook Page (P&C Tax Professionals – Australia) or simply reach out to us using our email address at pnctax@naver.com.

Thank you and bye for now!