HECS-HELP debt
A government loan for university fees, repaid automatically through the tax system once your income passes a threshold.
HECS-HELP covers tuition for eligible students and is repaid through your tax return rather than to a bank. There is no interest, but the balance is indexed each year on 1 June to keep pace with inflation.
Repayments start once your repayment income exceeds $67,000 in FY2025-26. The rate is a percentage of your entire repayment income, rising in bands as your income grows — it is not a flat instalment.
Your employer withholds extra tax through the year when you declare a HELP debt, and the actual repayment is calculated when you lodge. That is why some people get a surprise bill: the withholding is based on your salary alone, while the repayment is based on total repayment income.
Where the threshold bites
Earn $66,000 and you repay nothing. Earn $70,000 and a repayment kicks in on the amount above the $67,000 threshold — which is why a small pay rise can come with a new deduction attached.
The bit people get wrong
Repayment income is not just your salary. It adds back reportable fringe benefits, investment losses, and reportable super contributions — so salary sacrificing can lift your HECS repayment even as it lowers your income tax.
Common questions
At what income do HECS repayments start in FY2025-26?
Compulsory repayments begin once your repayment income exceeds $67,000. Below that, nothing is payable, though voluntary repayments are always allowed.
Does my HECS debt charge interest?
No interest is charged, but the balance is indexed annually on 1 June in line with inflation, so it still grows in dollar terms while it remains unpaid.
Should I pay off my HECS debt early?
It depends on your alternatives. Because HECS is indexed rather than charged interest, money that could earn more than the indexation rate elsewhere may be better invested — but paying it down removes a fixed drag on your take-home pay.
Run your own numbers
Related terms
Source: Australian Taxation Office