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X.1.1 - Enhancement - Finance Portal

Summary of Finance Portal Enhancement in version X.1.1 of the Entire OnHire application.

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Study and Training Support Loans (STSL) - Tax Scale Compulsory Repayment Changes

Study and Training Support Loans (STSL) - Tax Scale Compulsory Repayment Changes

From 1 July 2025, significant changes to the Study and Training Support Loans (STSL) will take effect, reshaping how compulsory repayments are calculated. These reforms introduce a higher minimum repayment income threshold and a new marginal repayment model, ensuring repayments are applied more fairly and progressively as income increases. The changes also align STSL with standard tax calculation methods,  improving consistency and transparency for both employers and employees.

These changes impact the following tax scales in the Entire OnHire Finance Portal as shown in the figure below:

  • SCALE 8 – STSL Tax-Free Threshold

  • SCALE 9 – STSL Non-Tax-Free Threshold

STSL2

The legislated changes to STSL compulsory repayments are:

  • The minimum repayment income threshold has increased to $67,000 (up from $54,435 in 2024–25).

  • Compulsory Repayments move to a marginal system, meaning STSL is calculated only on the portion of income above $67,000, rather than on the total repayment income.
  • The marginal repayment rates for the 2025–26 income year are:

    • 15 cents for every dollar of your repayment income above $67,000 up to $125,000

    • $8700 plus 17 cents for every dollar of your repayment income above $125,000 up to $179,285

    • 10% of your total repayment income if it is $179,286 or more

If your repayment income is $179,286 or more, your compulsory repayment remains 10% of your total repayment income. This change is designed to ensure you are not placed at a disadvantage as a result of the move to marginal rates.

What are the Key Changes?

  1. An updated Schedule 8 – Statement of formulas for calculating STSL components (NAT 3539), along with new weekly, fortnightly, and monthly tax tables, will take effect from 24 September 2025. 

  2. From this date, STSL withholding will be calculated using a new set of linear formulas (y = ax – b), replacing the previous calculation method. 

    In this formula:

    • y represents the weekly withholding amount (in dollars)
    • x is the employee’s weekly earnings, rounded to whole dollars and increased by 99 cents
    • a and b are fixed values that differ for each income range and determine how much is withheld

      This formula apply across the defined weekly earnings ranges to ensure withholding is calculated consistently under the new marginal system.
  3. Payers must apply the updated Schedule 8 prospectively for payments made on or after 24 September 2025.
  4. There is no requirement to recalculate withholding for payments made before this date.

What this Means in Practice

STSL will now work like a cumulative tax scale:
  • Only the income within each slab is charged at that slab’s rate.
  • As earnings increase, only the amount above each threshold is subject to the higher rate.
  • Once earnings reach the highest slab, the repayment is applied in a non-cumulative way (10% of total income), as defined in the tax tables.

This change aligns STSL with standard weekly tax calculations, making deductions fairer and more consistent across income levels.

For more details, click the link provided below:
Study and training loans – what's new | Australian Taxation Office

 

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