What is the HECS-HELP Repayment?
HECS-HELP is Australia's income-contingent student loan. It charges no interest, but the balance is indexed each June. Repayments are compulsory once repayment income exceeds the threshold — $67,000 for 2026–27 — and since 1 July 2025 they are worked out only on the income above that threshold, not on your whole income.
Because there is no real interest, HECS is the cheapest debt most Australians will ever hold — which is why voluntary repayment is rarely the best use of money.
Formula & worked example
$67,001–$125,000: 15c per $1 over $67,000
$125,001–$179,285: $8,700 + 17c per $1 over $125,000
$179,286 and over: 10% of total repayment income
Balance = (Balance × (1 + indexation)) − repayment
Worked example: $78,000 income with a $32,000 debt. Only the $11,000 above the threshold counts, at 15c in the dollar — $1,650 a year, about $138 a month, or 2.1% of total income. With 2.8% indexation and 3% income growth, the debt clears in 11 years, with indexation adding roughly $7,300 along the way.
How to use this hecs-help repayment calculator
- Enter your annual income — repayment is based on repayment income, close to taxable income.
- Enter your current HECS-HELP balance from myGov.
- Indexation is applied on 1 June each year, at the lower of CPI and the Wage Price Index.
- Repayments are withheld through PAYG but only credited after you lodge your return.
Smart tips
- HECS charges no interest — only indexation, capped at the lower of CPI and the Wage Price Index. It is almost always the last debt you should prioritise.
- Indexation is applied on 1 June, so a voluntary payment before then reduces the indexed amount.
- Under the marginal system in force since 1 July 2025, a pay rise only increases the repayment on the extra income — it no longer re-prices your whole income.
- Your employer withholds HECS through PAYG but it is only applied after lodgement, so the balance appears unchanged for months.
- HECS debt does not appear on your credit file, though lenders do consider the repayment in serviceability.
Frequently asked questions
When do I start repaying HECS-HELP?
For 2026–27, once your repayment income exceeds $67,000. You pay 15c on each dollar from $67,001 to $125,000, then 17c on each dollar above that, and 10% of total income once you pass $179,285.
Does HECS charge interest?
No. The balance is indexed annually at the lower of CPI and the Wage Price Index, which broadly preserves its real value but adds no real interest cost. Indexation was 2.8% on 1 June 2026.
Should I pay off HECS early?
Usually not. With no real interest, almost any other debt or investment is a better use of the money.
Does HECS affect my mortgage application?
The repayment reduces your assessable income for serviceability, so it can lower borrowing capacity even though it is not on your credit file.
Want the theory behind the numbers? Read our student loan guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 8 Sep 2026. How we check these numbers.