HECS Calculator

HECS, HELP and Repayment Income

HECS is the older name for HECS-HELP, one of the Higher Education Loan Program (HELP) loans. The ATO collects every HELP debt through the tax system. The compulsory repayment depends on repayment income, not on the pay that reaches a bank account.

Repayment income starts with taxable income, leaving out any First Home Super Saver released amount. It then adds four amounts that taxable income leaves out or has already reduced:

• reportable fringe benefits, the grossed-up value shown on the income statement
• total net investment loss, including net rental losses
• reportable super contributions, such as salary-sacrificed super
• exempt foreign employment income

A payslip shows two amounts that are easy to mix up. Gross salary is part of taxable income, so it starts the calculation. Net pay has already had income tax and HELP withholding taken out, so using it understates repayment income.

Rental losses and salary-sacrificed super reduce taxable income without reducing repayment income. Take a client with a $100,000 salary, a $10,000 net rental loss and no other income. Taxable income is $90,000, while repayment income stays at $100,000.

Compulsory Repayments and Salary Packaging

For 2026-27, the compulsory repayment is 15 cents for each dollar of repayment income from $69,528 to $129,717, plus 17 cents for each dollar above $129,717. The total is capped at 10% of all repayment income, which becomes the lower figure from $186,051. The repayment also can't exceed the HELP balance.

For 2025-26, the same rates apply above $67,000 and $125,000. The 10% cap becomes the lower figure from $179,286. Repayment income at or below the year's minimum repayment income attracts no compulsory repayment.

With $100,000 of repayment income in 2026-27, $30,472 sits above the minimum. At 15 cents per dollar, the compulsory repayment is $4,570.80, or $380.90 a month. The calculator shows these figures from its starting inputs.

The ATO's repayment rates table rounds the full 15% band to $9,028. The formula in section 154-20 of the Higher Education Support Act gives $9,028.35. Above $129,717, this calculator can show 35 cents more than the ATO's worked examples.

Salary packaging lowers taxable income, but the reportable fringe benefits amount adds the grossed-up value of the benefits back. Enter that reportable amount, not the dollars packaged. At $100,000 taxable income, $10,000 of reportable fringe benefits lifts repayment income to $110,000.00 and the repayment to $6,070.80.

The comparison table shows the same year without the benefits and with the packaged salary paid as cash. In a hypothetical case, an employee packages $15,900 and has $84,100 of taxable income and $30,000 of reportable fringe benefits. Repayment income is $114,100.00 and the repayment is $6,685.80. Paid as salary, the same $100,000 gives a repayment of $4,570.80.

Packaging raises the HELP repayment in that case because the grossed-up $30,000 is larger than the $15,900 of salary given up. The comparison covers HELP only. Any income tax saving from packaging needs its own calculation.

The monthly figure divides the annual repayment by 12 for a budget or servicing worksheet. Each lender's policy decides how it counts a HELP debt when it assesses a home loan.

Paying the Balance Off

Three amounts look alike but do different jobs. The compulsory repayment is the annual liability on the notice of assessment. Employer withholding is extra tax taken from each pay to cover that liability. The HELP balance is the debt shown in myGov.

The ATO applies employer withholding to the debt only after the tax return is lodged and the repayment is assessed. If more was withheld than the assessed repayment, the excess comes back through the tax assessment. If less was withheld, the client pays the gap.

Voluntary repayments reduce the balance once the ATO processes them. They do not reduce that year's compulsory repayment unless the balance falls below it. A voluntary repayment made before 1 June also reduces the amount indexed that day.

HELP debts are indexed on 1 June each year at the lower of CPI and wage price growth. Indexation applies only to debt more than 11 months old, so recent study debt joins the indexed balance at a later 1 June.

The clearance period is a hypothetical projection from the entered assumptions. Each projected year applies the voluntary repayment, then the compulsory repayment, then indexation on what remains. The ATO usually indexes on 1 June before it assesses that income year's repayment, so actual indexation can be slightly higher.

With the starting inputs, a $30,000.00 balance clears in 7 years, with the final repayment in 2032-33. That projection assumes 3% annual growth in income and thresholds and 2.8% indexation. Total repayments come to $32,447.14, which includes $2,447.14 of indexation.

A client who pays a reduced Medicare levy, or none, because of low family income makes no compulsory repayment for that year. This calculator assumes the levy applies normally.