A drain pump assembly for discharging condensate from a water heater appliance is provided. The drain pump assembly includes a condensate collection tray positioned below an evaporator of the water heater appliance for collecting condensate. A condensate level sensor is configured for measuring a level of condensate within the condensate collection tray and is in operative communication with a drain pump. The drain pump is configured for discharging collected condensate from the condensate collection tray when the level of condensate exceeds a first threshold and turning off after the condensate level drops below a second threshold.