How HECS-HELP Repayments Work in Australia

HECS-HELP (Higher Education Contribution Scheme – Higher Education Loan Program) is Australia’s income-contingent student loan system. Unlike traditional loans, you only repay when your income exceeds the minimum repayment threshold, and repayments are calculated as a percentage of your income.

How HECS-HELP Repayments Are Calculated

The calculation follows a specific formula based on Australian Tax Office (ATO) repayment thresholds and rates:

Your employer automatically withholds additional tax each pay period to cover your estimated HECS-HELP repayment. You then settle any difference when you lodge your tax return.

2024-2025 HECS-HELP Repayment Thresholds and Rates

These rates apply from July 1, 2024 to June 30, 2025:

Repayment Income	Repayment Rate	Example: $80,000 income	Weekly Deduction
Below $51,550	0.0%	$0	$0
$51,550 – $59,518	1.0%	$284.50	$5.47
$59,518 – $63,089	2.0%	$357.10	$6.87
$63,089 – $66,875	2.5%	$422.50	$8.12
$66,875 – $70,888	3.0%	$493.80	$9.50
$70,888 – $75,140	3.5%	$570.30	$10.97
$75,140 – $79,649	4.0%	$652.40	$12.55
$79,649 – $84,432	4.5%	$740.50	$14.24
$84,432 – $89,511	5.0%	$834.90	$16.06
$89,511 – $94,911	5.5%	$936.00	$18.00
$94,911 – $100,657	6.0%	$1,044.30	$20.08
$100,657 – $106,779	6.5%	$1,160.20	$22.31
$106,779 – $113,309	7.0%	$1,284.30	$24.70
$113,309 – $120,285	7.5%	$1,417.20	$27.25
$120,285 – $127,748	8.0%	$1,559.50	$30.00
$127,748 – $135,748	8.5%	$1,711.80	$32.92
$135,748 – $144,337	9.0%	$1,874.70	$36.05
$144,337 – $153,577	9.5%	$2,049.00	$39.40
$153,577 and above	10.0%	$2,235.30	$43.00

HECS-HELP Indexation: How It Works

Indexation is applied annually on June 1st and is based on the Consumer Price Index (CPI). Here’s how it has changed in recent years:

Year	Indexation Rate	Impact on $50,000 debt	Notes
2024	4.7%	+$2,350	Based on December 2023 CPI
2023	7.1%	+$3,550	Highest in over 30 years
2022	3.9%	+$1,950	Typical historical rate
2021	0.6%	+$300	Very low due to COVID-19
2020	1.8%	+$900	Below inflation target

Voluntary Repayments and the 10% Bonus

You can make voluntary repayments at any time, and for payments of $500 or more, you receive a 10% bonus:

The bonus applies to voluntary repayments only, not compulsory repayments. This makes voluntary repayments particularly valuable if you have spare cash.

When to Make Voluntary Repayments

• Before June 1st: Reduce your debt before indexation is applied
• When you have spare savings: Earn an effective 10% return (better than most savings accounts)
• Before your income increases: Reduce future compulsory repayments
• When you’re overseas: Optional repayments while not earning Australian income

Table of Truth: Example HECS-HELP Calculations

Use this table to verify your understanding of how repayments work:

Scenario	HELP Debt	Income	Repayment Rate	Annual Repayment	Years to Repay
Graduate starting out	$25,000	$65,000	3.0%	$543.75	46 years
Mid-career professional	$45,000	$95,000	6.0%	$2,520.00	18 years
High-income earner	$60,000	$140,000	8.5%	$8,761.80	7 years
Just above threshold	$30,000	$55,000	1.0%	$34.50	870 years*

Common HECS-HELP Questions Answered

When do I start repaying HECS-HELP?

You start repaying in the financial year after your income first exceeds the minimum repayment threshold ($51,550 for 2024-2025). Your employer will withhold additional tax from each paycheck once you provide them with a Tax File Number Declaration stating you have a HELP debt.

What counts as “repayment income”?

Repayment income includes: taxable income, net investment losses, reportable fringe benefits, and reportable super contributions. It’s typically higher than your take-home pay.

What if I move overseas?

If you move overseas for more than 6 months, you must update your contact details with the ATO and may need to make compulsory repayments if your worldwide income exceeds the threshold. Different rules apply depending on your destination country.

Can HECS-HELP be written off?

HECS-HELP is only written off if you die or become permanently incapacitated and unable to work. It cannot be included in bankruptcy. The debt remains until it’s repaid through the tax system.

How do I check my HELP balance?

You can check your HELP balance through myGov linked to the ATO, or wait for your HELP statement (usually sent in October each year). Your balance is also on your tax return notice of assessment.

What happens if I don’t earn enough to repay?

If your income is below the threshold, you don’t need to make repayments. Your debt will still be indexed each year, but no payments are required until your income exceeds the threshold.

Strategies for Managing Your HELP Debt

1. Make Voluntary Repayments Before June 1st

This reduces the balance that gets indexed. With the 10% bonus, you effectively get an immediate return that’s hard to beat with other investments.

2. Increase Your Tax Withholding

If you want to avoid a tax bill, you can ask your employer to withhold additional tax using the “Does the employee have a HELP, SSL, TSL, or Financial Supplement debt?” question on your TFN declaration.

3. Plan for Income Increases

If you know your income will jump significantly (promotion, new job), consider making voluntary repayments beforehand to reduce the higher repayments you’ll soon need to make.

4. Understand the Trade-Offs

HELP debt is the cheapest loan you’ll ever get. Consider whether paying it off faster is better than saving for a house deposit or investing in superannuation.

Common HECS-HELP Mistakes to Avoid

HECS-HELP vs Other HELP Loans

HECS-HELP is just one type of HELP loan. Here’s how they compare:

Loan Type	For	Repayment	Indexation	Notes
HECS-HELP	Commonwealth supported places	Income-contingent	Yes, CPI	Most common student loan
FEE-HELP	Full-fee paying places	Income-contingent	Yes, CPI	Higher loan limits
SA-HELP	Student services and amenities	Income-contingent	Yes, CPI	Smaller amounts
OS-HELP	Overseas study	Income-contingent	Yes, CPI	For exchange programs