Study and training support loans¶

Many people study with the help of a government loan, such as a HELP loan (you may know it as HECS). These are grouped together as study and training support loans, often shortened to STSL. When an employee has one of these loans, an extra amount is taken out of their pay to go towards paying it back.

The good news is you do not have to work the amount out yourself, and it is not a separate bill. The ATO's tables and payroll software work it out and add it to the tax already being withheld from the pay.

In one line

When an employee tells you they have a study or training support loan, an extra amount is withheld from each pay towards it — worked out by the ATO tables, not by you.

Why this matters¶

If an employee has one of these loans and you do not withhold the extra amount, they can end up with a tax bill at the end of the year. Knowing how it works helps you answer an employee who asks why a bit extra comes out of their pay, and helps you set it up correctly when they start.

What you will learn¶

What a study and training support loan is
How an employee tells you they have one
How the extra amount that is withheld is worked out

Understanding the concept¶

A study and training support loan is a government loan that helped a person pay for study or training. HELP loans (which many people call HECS) are the most common kind. There are others too, but they all work the same way for payroll.

An employee tells you they have one on their tax file number (TFN) declaration — the form they fill in when they start. The ATO explains that the employee answers Yes to the loan question on that form. If they are already working and their answer changes, they can complete a withholding declaration instead.

Once you know an employee has a loan, an extra amount is taken out of each pay on top of the normal tax. This extra amount is a repayment towards the loan. It is not a separate invoice you send — it is bundled into the tax you already withhold and send to the ATO.

How much extra comes out depends on the employee's income. The ATO describes these as income-contingent loans: the more the employee earns, the more is repaid, and below a set income level nothing is repaid at all. The exact amount for each pay is worked out by the ATO's tables and by payroll software, so you do not calculate it by hand.

For accountants & bookkeepers

The STSL component is calculated by the ATO's study and training support loans withholding schedules and applied on top of PAYG withholding. It applies to the payee's earnings, including taxable allowances, bonuses and commissions, and does not apply where the payee has not provided a TFN. The compulsory repayment for the year is ultimately reconciled through the employee's tax return against their repayment income; the amount withheld during the year is a pay-as-you-go estimate, not the final figure. Direct any question about a specific person's loan balance or thresholds to the ATO.

Example¶

Priya starts a new job and fills in her TFN declaration. She has a HELP loan from her university course, so she answers Yes to the study and training support loan question and gives the form to her employer.

From then on, each pay has the normal tax taken out, plus a small extra amount for her loan. She does not get a separate bill — the extra amount is part of what her employer withholds and sends to the ATO. Because the amount depends on what she earns, it goes up in a pay period where she works overtime and earns more. Priya can see the tax withheld on her payslip.

Common mistakes¶

Thinking the loan repayment is a separate bill the employer has to calculate — it is worked out by the ATO tables and bundled into the withholding.
Forgetting to set it up when the employee said Yes on their TFN declaration, which can leave the employee with a tax bill at year end.
Expecting the same extra amount every pay — it depends on the employee's income for that pay period, so it can change.

How this works in myaccountant¶

In the app — when you record an employee's answers from their TFN declaration, you tell myaccountant whether they have a study and training support loan. When you run a pay run, the app works out the tax to withhold and, if the employee has a loan, includes the extra amount for it. The tax withheld appears on the payslip you can email to the employee.

Key points¶

A study and training support loan (STSL) includes HELP loans (often called HECS).
The employee tells you they have one by answering Yes on their TFN declaration.
An extra amount is withheld from each pay towards the loan.
It is not a separate bill — it is bundled into the tax you send to the ATO.
The amount depends on the employee's income and is worked out by the ATO tables.
Not setting it up can leave the employee with a tax bill at year end.

Learn next¶

General information only — not tax, super or financial advice.

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