HECS-HELP Repayment Calculator
Work out your 2026-27 compulsory HECS-HELP repayment under the marginal system, and how many years the debt takes to clear after indexation.
How to use this calculator
- 1Enter your repayment income — taxable income plus any salary sacrificed to super, reportable fringe benefits and rental losses.
- 2Enter your outstanding HELP balance from myGov or your latest notice of assessment.
- 3Set an indexation rate; recent years have run around 3–4%, and it is capped at the lower of CPI and wage growth.
- 4Check the years-to-clear figure against whether voluntary repayments are worth making at all.
How the calculation works
Repayment = 15% × (income − $69,528) up to $129,717, then 17% above. Nothing is due below the threshold- repayment income
- Taxable income plus reportable fringe benefits, reportable super contributions and net rental losses
- marginal
- Only income above each threshold counts — the rate never applies to your whole income
The marginal system began on 1 July 2025 and replaced a schedule where the applicable percentage applied to total income. Under the old rules crossing a threshold by a dollar could increase the repayment by hundreds, which is why so many people deliberately avoided small pay rises.
Repayment income is wider than taxable income. Salary sacrificed to super is added back, which catches people who sacrifice heavily and expect their HELP repayment to fall proportionally.
HELP charges no interest. The balance is indexed once a year on 1 June, capped since 2024 at the lower of CPI and the wage price index, so it tracks rather than outruns average earnings.
Worked example
$95,000 income with a $35,000 debt
- 1.Income above the threshold is $95,000 − $69,528 = $25,472.
- 2.That falls entirely inside the first band, so the repayment is 15% × $25,472 = $3,820.80.
- 3.As a share of total income that is about 4% — far below the 15% headline band rate, because only the excess is counted.
- 4.Under the pre-2025 system the applicable rate would have applied to the whole $95,000.
Result: $3,820.80 — about 4% of total income
Just above the threshold
- 1.Income exceeds the threshold by only $472.
- 2.The repayment is 15% of that excess = $70.80.
- 3.Under the old system, crossing the threshold applied a percentage to the entire $70,000 — a bill of well over a thousand dollars.
- 4.The marginal system removed that cliff entirely.
Result: $70.80 — where the old system charged over a thousand
The cliff that no longer exists
Until 30 June 2025, HELP repayments worked on a step schedule: your income determined a percentage, and that percentage applied to your entire income. Crossing a threshold by a single dollar moved you to the next percentage on everything, which could increase your repayment by more than a thousand dollars.
The consequence was perverse and well documented. Workers near a threshold were financially better off refusing overtime, declining a small pay rise, or deferring income to the next year. A tax system that punishes people for earning slightly more is a design failure, and this one did so sharply.
From 1 July 2025 repayments became marginal, exactly like income tax. Only the income above each threshold is counted. Earning one dollar more now costs at most 17 cents, and the cliff is gone. Any calculator still showing the old behaviour is modelling a system that has been repealed.
Repayment income is not taxable income
The figure used to assess your repayment is broader than the one you pay income tax on, and the difference catches people out.
Repayment income adds back reportable fringe benefits, reportable employer super contributions — which includes anything you salary sacrifice — and net investment or rental losses. Someone who sacrifices heavily into super to reduce taxable income will find their HELP repayment barely moves, because the sacrificed amount is added straight back.
This is deliberate. It stops the repayment obligation being avoided through arrangements that reduce taxable income without reducing actual economic capacity.
Should you repay it early?
Usually not, and the reasoning is unusually clear-cut for a financial question.
HELP charges no interest. The balance is indexed once a year to keep pace with prices, and since 2024 the indexation rate is capped at the lower of CPI and the wage price index — so the debt cannot grow faster than average wages. It is, in real terms, close to free money, and it is the cheapest debt most people will ever hold.
Almost any other debt should be cleared first: a mortgage, a car loan and certainly a credit card all cost more. Money that would go to voluntary HELP repayments is generally better directed at higher-rate debt, or invested where the expected return exceeds the indexation rate. The debt is also forgiven on death and never pursued against your estate.
There are two honest counterarguments. A large HELP balance reduces borrowing capacity on a mortgage application, because the compulsory repayment is treated as a committed expense. And some people simply value being rid of it. Both are legitimate — they are just not arithmetic arguments.
What this assumes, and where it stops
Assumptions
- 2026-27 thresholds and the marginal repayment system apply.
- Repayment income is entered as the ATO defines it, including add-backs.
- Indexation is applied annually before that year's repayment.
- Income grows at the constant rate entered, and thresholds are held fixed rather than indexed.
Limitations
- Repayment thresholds are indexed annually and are held constant across the projection, which understates the years to clear slightly.
- Voluntary repayments are not modelled, and they reduce the balance but not the compulsory amount for the year.
- Repayments are collected through PAYG withholding during the year and reconciled at assessment, so cash flow differs from the annual figure shown.
- Other study loans — VET Student Loans, SFSS — share the same thresholds but are not separately tracked here.
Common questions
What is the HECS repayment threshold for 2026-27?
$69,528 of repayment income. Below it no compulsory repayment is due. Above it you repay 15% of the amount over the threshold, rising to 17% on income above $129,717. Because the system is marginal, the effective rate on your total income is much lower than those headline figures — someone on $95,000 repays about 4% of what they earn.
Did HECS repayments change recently?
Yes, fundamentally, on 1 July 2025. Repayments used to be a percentage of your entire income, so crossing a threshold by one dollar could cost over a thousand dollars and made small pay rises genuinely counterproductive. They are now marginal, like income tax — only the income above each threshold counts. Many calculators and guides still model the old system.
Should I pay off my HECS debt early?
Usually not. HELP charges no interest; the balance is only indexed to keep pace with prices, capped since 2024 at the lower of CPI and wage growth. It is the cheapest debt most people will ever have, so clearing a mortgage, car loan or credit card first is almost always better. The main counterargument is that a HELP balance reduces mortgage borrowing capacity, since the repayment counts as a committed expense.
Does salary sacrificing reduce my HECS repayment?
No. Repayment income adds back reportable employer super contributions, which includes anything you salary sacrifice, along with reportable fringe benefits and net rental losses. This is deliberate: it prevents the repayment obligation being reduced by arrangements that lower taxable income without lowering actual capacity to pay. Sacrificing still saves income tax — it just will not cut your HELP repayment.
Sources
- Study and training loan repayment thresholds and rates — Australian Taxation Office
- Study and training support loans — Australian Taxation Office
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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