HECS-HELP repayment, in plain English

HECS-HELP is the Australian Government's income-contingent student loan for domestic undergraduate students at a Commonwealth Supported Place. It funds the student contribution amount that the university charges, and you repay through the ATO once you start earning above a published threshold.

What HECS-HELP covers

HECS-HELP covers the student contribution for each subject you enrol in at a CSP. It does not cover textbooks, accommodation, transport or living costs. Those sit outside the loan.

For full-fee places, FEE-HELP is the equivalent program. The repayment rules are the same once the debts hit the ATO.

How repayment works

Three rules make HECS-HELP different from other loans you might have heard about:

1. Income-contingent. You only repay in years where your repayment income is above the minimum threshold. In 2026-27 that threshold is $69,528 ($67,000 in 2025-26).
2. Marginal repayment. Since 1 July 2025, repayment works like the income-tax brackets: you repay 15 cents for each dollar of repayment income above the minimum threshold. The 2026-27 rules are: nothing up to $69,528; 15c per $1 over $69,528; $9,028 plus 17c per $1 over $129,717; and above $186,050 a flat 10% of your whole repayment income. (For 2025-26 the equivalent figures were $67,000, $125,000 with a $8,700 base, and $179,285.) The old system, where a single rate applied to the whole of your income, ended in 2024-25.
3. Indexation, not interest. There is no interest on a HECS debt. The outstanding balance is indexed each 1 June. Since the 2024 change to indexation rules, indexation is the lower of CPI or the Wage Price Index, so the debt cannot grow faster than wages. The rate applied on 1 June 2026 was 2.8%. Separately, the Government legislated a one-off 20% reduction to HELP balances as at 1 June 2025.

Repayment income, not just salary

The ATO calculates compulsory repayment from "repayment income". That figure adds together:

• Your taxable income.
• Any reportable fringe benefits (RFB).
• Reportable employer super contributions (RESC), such as salary-sacrificed super above the compulsory rate.
• Net investment losses, such as a rental property you negatively gear.
• Exempt foreign employment income.

This means salary-sacrificing into super does not always reduce your HECS repayment, because the sacrificed amount usually flows back into repayment income via RESC.

What you should do at tax time

Your employer withholds extra tax towards your HELP debt during the year if you answer yes to the study and training loan question on your Tax File Number declaration. When you lodge your return, the ATO reconciles the withheld amount against the rate that actually applies to your repayment income.

If you have multiple jobs, ask your secondary employer to withhold extra. Otherwise you can end up with a bill at tax time because each employer assumes you only earn what they pay you.

Voluntary repayments

You can pay extra into your HECS-HELP debt at any time via BPAY or the ATO online services. Voluntary repayments reduce the balance immediately, which means less indexation on 1 June. There is no longer a discount on voluntary repayments; that ended in 2017.

For the active calculator that turns this into dollars, see the HECS-HELP repayment calculator.

The information here is general and explanatory only and does not constitute financial advice. For advice on your circumstances, see a licensed financial adviser.