HECS-HELP repayments, explained
A HECS-HELP loan has no interest and no fixed repayments. Instead you repay a share of your income once it passes a threshold, and the balance is indexed each year. Here is how much you repay, and when paying extra is worth it.
How compulsory repayments work
Once your repayment income is above $69,528 in 2026–27, you repay a share of the income above that threshold. Repayment income is your taxable income plus reportable fringe benefits, reportable super contributions (such as salary sacrifice), net investment losses and exempt foreign income.
| Repayment income | Repayment |
|---|---|
| 0 – $69,528 | Nil |
| $69,529 – $129,717 | 15c for each $1 over $69,528 |
| $129,718 – $186,050 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of your total repayment income |
The repayment is worked out in your tax return, and goes towards your debt. If you tell your employer you have a study loan on your tax file number declaration, they withhold extra from each pay to cover it, so you don’t get a bill at tax time.
Repayments on common salaries in 2026–27
| Salary | Repayment income | Yearly repayment |
|---|---|---|
| $60,000 | $59,000 | $0 |
| $80,000 | $79,000 | $1,420.80 |
| $100,000 | $99,000 | $4,420.80 |
| $150,000 | $149,000 | $12,306.11 |
| $200,000 | $199,000 | $19,900 |
Repayment income here is salary less the $1,000 standard deduction.
Indexation
On 1 June each year, the part of your debt that has been owing for more than 11 months is increased by the indexation rate: the lower of CPI and wage growth. It was 2.8% in 2026. In 2025, every balance was also reduced by 20% as a one-off.
Should you pay extra?
Voluntary repayments go straight off your balance, and there is no bonus or discount for making them. Their benefit is avoiding future indexation:
- With a $25,000 debt and a salary of $80,000 rising 3% a year, compulsory repayments alone clear the debt in about 18 years, with $7,784.71 of indexation added along the way.
- Paying an extra $2,000 a year clears it in about 8 years, with $2,776.87 of indexation: a saving of $5,007.84.
Indexation is usually lower than mortgage or credit card interest, so paying those down first, or building savings, often comes first. Extra payments make most sense if indexation is high, you have no costlier debt, or you are close to paying it off. Pay before 1 June to avoid that year’s indexation on the amount.
Sources: ATO, Study and training loan repayment thresholds and rates; Study and training loan indexation rates; Voluntary repayments.
Frequently asked questions
Does HECS-HELP charge interest?
No interest, but the balance is indexed each 1 June to keep up with prices. Since 2023 indexation is the lower of the consumer price index and the wage price index; on 1 June 2026 it was 2.8%.
Does a HECS-HELP debt affect a home loan?
Lenders count the compulsory repayment as a cost that reduces how much you can borrow, as it comes out of your pay. Paying the debt off early can increase your borrowing capacity, but it uses money you could put towards a deposit, so it is worth asking a lender or broker how much difference it makes for you.
I earn under the threshold. Do I still owe it?
The debt stays, but you make no compulsory repayment in any year your repayment income is $69,528 or less in 2026–27. Indexation still applies each year.
General information based on ATO rules and rates, not tax advice. Figures are worked out by our calculators; see how we calculate.