HECS Repayment Calculator
Calculate your compulsory HECS-HELP student loan repayment amount based on your income.
Quick Use Samples
HECS/HELP Details
Repayment Projection
Based on your income of $75,000, your compulsory annual HECS/HELP repayment is $2,625, which is 3.5% of your income. It is projected to take 9 years to pay off your debt. You will pay a total of $30,335, which includes $5,335 in indexation.
Debt Reduction Over Time
Year-by-Year Breakdown
| Year | Income | Repayment | Indexation | Remaining Debt |
|---|---|---|---|---|
| 1 | $75,000 | $2,625 | $911 | $23,350 |
| 2 | $77,250 | $2,704 | $841 | $21,557 |
| 3 | $79,568 | $3,183 | $749 | $19,215 |
| 4 | $81,955 | $3,278 | $651 | $16,686 |
| 5 | $84,413 | $3,799 | $528 | $13,538 |
| 6 | $86,946 | $3,913 | $396 | $10,154 |
| 7 | $89,554 | $4,478 | $237 | $6,072 |
| 8 | $92,241 | $5,073 | $48 | $1,236 |
| 9 | $95,008 | $1,284 | $0 | $0 |
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What is a HECS-HELP Repayment?
HECS-HELP is the Australian Government's loan scheme for eligible students to pay for their university fees. A HECS-HELP repayment is a compulsory payment you make towards this loan once your income reaches a certain threshold. The repayments are collected through the tax system by the ATO.
Behind the Formula
The repayment amount is calculated as a percentage of your 'repayment income'. This income is your taxable income plus any net investment losses, reportable fringe benefits, and other adjustments. The ATO sets tiered percentage rates, so the more you earn, the higher the percentage of your income that goes towards repaying the loan. The calculator applies these official ATO rates to your income to determine your compulsory repayment amount.
Expert Insights
- Your HECS-HELP debt is indexed each year on June 1st based on the Consumer Price Index (CPI). In a high-inflation environment, the amount your debt increases due to indexation can be substantial, sometimes more than your compulsory repayments.
- Making voluntary repayments directly to the ATO no longer results in a bonus or discount. It's now generally only financially beneficial if you want to pay off the loan faster, for example, before applying for a home loan, as some lenders consider the debt in serviceability calculations.
- If you work overseas for an extended period, you are still required to declare your worldwide income to the ATO and make repayments on your HECS-HELP debt.
Actionable Tips
- Inform your employer that you have a HECS-HELP debt by filling out the relevant section on your Tax File Number Declaration form. This ensures they withhold the correct extra amount from your pay to cover your repayment.
- Check your HECS-HELP balance and indexation each year through your myGov account linked to the ATO. This helps you keep track of your debt and understand the impact of inflation.
- If your compulsory repayments are not enough to cover the annual indexation, your debt will continue to grow. Consider making voluntary repayments if your debt is large and inflation is high, after seeking financial advice.
Real-World Examples
A Graduate Starting Their First Job
A graduate starts a job with a salary of $70,000. Based on the current repayment rates, they will have approximately 2.5% of their income, or $1,750, withheld as a HECS-HELP repayment for the year.
High-Income Earner
A doctor earning $150,000 per year will have a much higher percentage of their income go towards their HECS-HELP debt. The repayment rate at this income level is 10%, meaning they will repay $15,000 in that year.
Impact of Inflation (Indexation)
Someone has a $50,000 HECS-HELP debt. If the annual CPI is 4%, their debt will increase by $2,000 due to indexation. If their compulsory repayment for the year is only $1,500, their debt will have actually grown by $500 despite them making payments.
Glossary of Terms
Repayment Income
The income figure the ATO uses to calculate your compulsory HECS-HELP repayment. It's your taxable income plus other items like net investment losses.
Indexation
The process by which the value of your HECS-HELP debt is adjusted annually to maintain its real value by aligning it with the Consumer Price Index (CPI).
myGov
A secure online portal for accessing Australian Government services, including the ATO, where you can view your tax and HECS-HELP information.