HECS-HELP Repayment Explained in Australia

HECS-HELP is Australia’s student loan system. Repayments generally start only when your repayment income reaches the compulsory repayment threshold.

What is HECS-HELP?

HECS-HELP is a student loan arrangement that helps eligible Australian students pay for higher education. Instead of paying the full tuition amount upfront, eligible students can defer their fees and repay the loan later through the Australian tax system.

HECS-HELP debt is commonly called student debt, HELP debt, or HECS debt. The loan is not repaid like a normal bank loan. Instead, compulsory repayments are generally based on your repayment income.

When do you start repaying HECS-HELP?

For the 2025–2026 income year, the minimum compulsory repayment threshold is $67,000. If your repayment income is below this threshold, you generally do not need to make a compulsory repayment.

From 2025–2026, compulsory repayments are calculated using a marginal repayment system. This means repayments are based on income above the threshold rather than applying a rate to your total income.

How is HECS-HELP repayment calculated?

HECS-HELP compulsory repayments are calculated by the Australian Taxation Office when you lodge your tax return. The calculation is based on repayment income, not simply your salary.

Repayment income may include taxable income plus certain additional amounts. This is why your HELP repayment result can differ from a simple salary estimate.

Does HECS-HELP affect take-home pay?

Yes. If your employer withholds extra amounts for your study loan, your regular take-home pay may be lower during the year. Your final compulsory repayment is then calculated when you lodge your tax return.

To estimate how tax affects your salary, use the Take-Home Pay Calculator or the Australia Income Tax Calculator.

HECS vs HELP vs student debt

HECS is one type of HELP loan. In everyday language, Australians often use “HECS debt” to refer to student loans generally. HELP is the broader loan program, while HECS-HELP relates to eligible Commonwealth supported higher education places.

Can you make voluntary repayments?

Yes. Voluntary repayments can usually be made at any time. However, voluntary repayments are separate from compulsory repayments and do not automatically replace a compulsory repayment required through the tax system.

Frequently Asked Questions

What is the HECS repayment threshold for 2025–2026?

The minimum compulsory repayment threshold for 2025–2026 is $67,000.

Is HECS repayment based on gross income?

HECS-HELP repayments are based on repayment income, which may include taxable income and certain additional amounts.

Do voluntary repayments reduce compulsory repayments?

Voluntary repayments can reduce your loan balance, but they are separate from compulsory repayments calculated through the tax system.

Does HECS affect my tax refund?

It can. When you lodge your tax return, the ATO calculates your compulsory repayment. If withholding during the year was too high or too low, your refund or payable amount may be affected.

Disclaimer

This guide is for general informational purposes only and does not constitute tax, financial or legal advice. Always consult the Australian Taxation Office, StudyAssist, or a registered tax professional for official guidance.