🇦🇺 HECS-HELP Repayment Calculator 2026
Compulsory repayment · Income tax · Take-home pay · Years to debt-free · Updated ATO thresholds
What Is HECS-HELP? The Quick Version
HECS-HELP is the Australian Government's income-contingent student loan program. If you studied at an eligible higher education provider — almost every university in Australia — the government lent you the money for your tuition fees. You repay it through the tax system once your income crosses a threshold. No monthly bills, no credit checks, no compound interest.
More than 3 million Australians carry a HECS-HELP debt, with a combined balance now exceeding $78 billion. The average debt for a bachelor's degree graduate sits at approximately $26,000 to $28,000, according to government data and analysis from registered financial professionals.
What makes it different from a personal loan is the repayment mechanic: you only pay when you earn enough, and only on the income above the threshold — not on every dollar you earn. In 2025-26, that system changed fundamentally. If you want to understand what comes out of your pay packet, our Australia salary after-tax calculator shows HECS repayment alongside your full income breakdown.
The Biggest HECS Changes in a Generation: What Happened in 2025–26
If you have not checked your HELP debt since early 2025, you are in for a surprise — a largely pleasant one. The 2025–26 financial year brought three simultaneous changes that, together, represent the most significant reform to the HECS-HELP system in decades.
The 20% Debt Cut
The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 became law on 2 August 2025. The Australian Taxation Office applied a one-off 20% reduction to all eligible HECS-HELP balances as at 1 June 2025 — automatically, before that year's indexation was added.
You did not need to apply. If you had a $30,000 debt on 1 June 2025, it became $24,000. For the average debtor carrying approximately $27,600, the cut wiped around $5,520 from the balance before a single repayment was required. High-balance graduates — those with medical, dental, or law degrees carrying $80,000 to $104,000 in debt — received the largest dollar reductions.
The 20% reduction was applied by the ATO and notified via SMS, email, or myGov Inbox. Check your ATO online account via myGov to see your current balance if you haven't already. Source: ATO — Study and training loans: what's new.
The New Repayment Threshold: $67,000
The minimum repayment income jumped from $54,435 in 2024–25 to $67,000 in 2025–26 — an increase of $12,565 in a single year. Anyone earning $67,000 or less makes zero compulsory repayment, regardless of how large their debt is.
This change removed a significant number of lower-income earners from the repayment system entirely. Recent graduates, part-time workers, and those taking career breaks below this income level now accumulate no compulsory repayments — though their debt still accrues indexation each June.
The New Marginal Repayment System
This is the most technically important change. From 2025–26, the ATO switched from a flat-rate system (where a single percentage applied to your entire income) to a marginal repayment system — where you only pay on income above the threshold.
Source: ATO — Study and training loan repayment thresholds and rates
HECS Indexation in 2026: The Silent Balance Grower
Indexation is the mechanism that adjusts your HELP debt upward each year to preserve its real value. It applies on 1 June to all debts at least 11 months old — and it applies whether you are earning above the threshold or not. Below-threshold earners still see their balance grow.
Since 1 June 2023, the ATO caps indexation at the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). Before this reform, debts grew at raw CPI — which hit 7.1% in June 2023, generating enormous anger and media coverage. The WPI cap brought that down to 3.2% on a backdated basis.
Indexation applies to your balance on 1 June. Any voluntary repayment made before 1 June reduces the balance that indexation is calculated on — meaning you save on the inflation-linked growth, not just the debt itself. It is the single most strategically valuable time to make a voluntary payment.
Should You Make Voluntary Repayments?
Since July 2022, the ATO no longer offers a 5% bonus for voluntary repayments. The incentive that once made paying ahead financially attractive is gone. This does not mean voluntary repayments are useless — it means the calculus changed.
The case for voluntary repayments now rests on one question: do you have a better use for the money? HECS-HELP remains one of the cheapest debts most Australians will ever carry. There is no interest — only indexation. Compare that to a mortgage at 6%+, credit card debt at 20%+, or a personal loan. Those should be cleared first.
If you have no high-interest debt, a healthy emergency fund, and are not planning to buy property in the near term — voluntary repayments before 1 June each year reduce both the balance and the amount indexed. For large debts or those approaching retirement with super considerations, a financial adviser can help model the trade-offs. For the full salary picture, our ATO tax calculator shows how repayments interact with your income tax.
One strategy worth knowing: the marginal repayment system eliminates the old "threshold cliff" problem. Previously, crossing a threshold by $1 could trigger a large jump in repayments. Under the new system, there is no cliff. Salary sacrifice to super no longer makes sense purely as a HECS avoidance strategy — though it remains valuable for tax and retirement purposes. See our Australia superannuation calculator to model salary sacrifice and super contributions side by side.
How to Use This HECS-HELP Repayment Calculator
The calculator gives you a full picture in a single view — not just the HECS repayment, but income tax, Medicare levy, take-home pay, and a debt payoff projection based on your current balance and indexation assumption. Here is how to get the most from it:
Your repayment income for ATO purposes may include more than your base salary — it also includes reportable fringe benefits, net rental losses, and reportable employer super contributions. Use the ATO's own estimator for the most precise figure: StudyAssist.gov.au.
Frequently Asked Questions About HECS-HELP in 2026
Explore More Australian Financial Calculators
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