HELP repayment income

In a recent ATO training session, specific mention was made regarding potential issues with tax liabilities arising from HELP (Higher Education Loan Program) repayments even though the employer was withholding monies for HELP debts.

For example: an employee earning $100k and salary sacrificing $30k had a "taxable gross" income of $70,000. The ATO indicates that employer will only be required to withhold monies based on $70,000 but HELP repayment calculations are still based on $100,000. Because of this, there is going to be a discrepancy between what the employer remits and what is determined to be remitted under the HELP.

We are not 100% certain how payroll systems are going to cope with this potential problem; however we felt it important to notify employers so that they can monitor any employees with a HELP debt.