HECS-HELP Repayment Calculator

From 1 July 2025, HECS-HELP uses a marginal repayment system (similar to income tax). You only pay a percentage of the income above each threshold, not your whole income.

The 2025–26 thresholds are:

• Under $67,000: No compulsory repayment
• $67,000–$125,000: 15% of income above $67,000
• $125,000+: 17% of income above $125,000 (plus the 15% on the bracket below)

This is more generous than the old "% of total income" system that applied before 2025.

Repayment income (RI) is your taxable income plus several add-backs:

• Reportable fringe benefits (e.g. salary packaging)
• Reportable super contributions (e.g. salary sacrifice)
• Net investment losses (negative gearing)
• Net foreign-source income
• Total foreign income

It's a broader measure than just your salary, designed to stop people artificially reducing their taxable income to avoid HECS repayments. Your accountant or the ATO calculates this when you lodge your tax return.

HECS-HELP balances are indexed on 1 June each year. The indexation rate is the lower of CPI or the Wage Price Index (WPI), under reforms passed in 2024.

Recent indexation rates: 4.0% (2024), 4.7% (2023), 3.9% (2022). The 2024 reform also retroactively reduced 2023 and 2024 indexation, with refunds processed by the ATO.

Indexation isn't a "new debt" — it just keeps your balance in real terms. But it's why repayments alone often barely keep pace with the indexed balance until your income rises.

Yes — voluntary repayments at any time go straight to your loan balance. Pay before 1 June to avoid that year's indexation on the amount paid.

Whether it's worth it depends on your interest opportunity cost: if you have other debt at higher rates (credit cards, personal loans), pay those first. If you can earn 5%+ in a high-interest savings account or super and HECS indexation is 3–4%, the maths often favours not prepaying. But many people prefer the psychological win of clearing the debt.

Yes. If your income is over the threshold, your employer withholds an extra amount from each pay (in addition to PAYG income tax). This is shown as "HELP" or "HECS" in your withholding section.

This withheld amount goes to the ATO during the year, then your actual compulsory repayment is calculated when you lodge your tax return. If too much was withheld, it's refunded; if too little, you'll owe the difference.

No. HECS-HELP repayments are not tax-deductible — even if your job requires the qualification you studied for. This is settled tax law and a common point of confusion.

However, the course fees themselves may be deductible if the study has a sufficient connection to your current work (self-education expenses). HECS-HELP repayments to the ATO are separate from this.

Yes — and significantly. Most lenders treat your HECS repayment as an ongoing committed expense (like a credit card minimum), reducing your servicing capacity by the annual repayment amount × ~5–10x in borrowing terms.

For a $90,000 income with a HECS balance, the ~$3,450 annual repayment can reduce maximum borrowing by $35,000–$70,000 depending on the lender. Some lenders treat HECS as a temporary debt and ignore it if your balance is small (e.g. under one year of repayment) — worth asking your broker.