Changes to Study and Training Support Loan (STSL) Repayments

The Australian Government has made changes that will reduce the amount of study and training support loans (STSL) to be repaid through their tax.

Here’s what you need to know.

What’s changing for STSL repayments?

On 2 August 2025, the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025  became law. This new legislation changes how compulsory repayments for study and training support loans are calculated, and also raises the STSL income threshold at which repayments start.

In simple terms:

• Most people will repay less on their study or training loan.
• The income threshold is higher, so repayments may not need to start as early.
• The way repayments are calculated is changing, which affects how much is withheld from each pay.

What does this mean for employers?

To support these changes, the Australian Taxation Office (ATO) has updated the Schedule 8 Tax Tables. These tables are used to calculate how much tax to withhold from employees who have a study or training support loan.

Key dates and details:

• The updated Schedule 8 will take effect from 24 September 2025.
• Employers must use the new STSL tax rate for any payments made on or after 24 September 2025.
• There’s no need to adjust past payments made before this date.

The new formulas use a straight-line equation to calculate the amount withheld. Making this updated process more consistent and easier to manage.

Updates to Schedule 8 Tax Tables and Payroll Software

From a payroll software perspective, these changes mean:

• Updated STSL tax tables to ensure correct withholding for employees with study or training loans.
• Compliance is key—using outdated formulas after 24 September could result in incorrect withholding and potential penalties.

How Aurion supports compliance with STSL component changes

To support these changes, a new file download will be made available with the updated Schedule 8 Tax Tables, located on the EOFY – Supporting Documents & Files section of our website, exclusively for customers using Aurion as their payroll solution. Providing confidence to our customer community that their organisation remains compliant with the latest ATO requirements.

By staying ahead of these changes, our team of experts help Australian and New Zealand businesses to reduce risk, save time, and focus on what matters most – their people.

Where can I learn more about student loan tax threshold?

The ATO will be sharing more information in the lead-up to this change. You can also find the updated tax tables and formulas on the ATO website closer to the 24 September 2025 deadline.

Let’s chat – speak with our payroll experts

If you need a payroll partner who supports you with payroll compliance changes, speak with our expert team. Our Aurion payroll specialists are available to discuss how we can streamline your payroll and provide additional support. You can reach our team by:

• calling 1300 287 466
• sending an email to [email protected]
• leave your details with us to get back to you

We’re excited to partner with you to make life work better!