Estimate your compulsory HECS-HELP repayments, how indexation affects your balance, and roughly how many years it could take to repay your debt.
Repayment thresholds and rates as of 2024-25 (example)
This calculator estimates your compulsory annual HECS-HELP repayment based on your income and the ATO's 2024-25 repayment income thresholds, projects how annual CPI indexation affects your outstanding balance, and estimates how many years it could take to repay your study debt given your income and expected income growth. HECS-HELP (formerly just HECS) is a government loan scheme that allows eligible higher education students to defer the cost of their studies and repay the debt through the tax system once their income exceeds a threshold.
HECS-HELP repayments are compulsory once your repayment income exceeds the minimum threshold (A$54,434 for 2024-25). The repayment is a percentage of your total income — not just the amount above the threshold — and the rate increases with income in brackets set by the ATO. Your balance is also indexed annually to CPI on 1 June, before repayments are applied.
Formula: Annual Repayment = Income × Repayment Rate (from ATO table). Indexation: Balance = Balance × (1 + CPI Rate) on 1 June. Net change = Repayment − Indexation amount. Repayment rates (2024-25, examples): below A$54,434: 0%; A$54,435–A$62,850: 1%; A$62,851–A$66,620: 2%; rising to 10% above A$159,664.
Example: A$25,000 HECS-HELP debt with A$65,000 income at 4% indexation (example rate — check ATO for current rate): The 2024-25 repayment rate for A$65,000 is 2%, giving an annual compulsory repayment of A$1,300 (A$108.33/month). After Year 1 indexation (A$1,000 added) less repayment (A$1,300 deducted), the balance falls to about A$24,700. (Note: this example is illustrative — actual rates and thresholds change annually.)
HECS-HELP is Australia's income-contingent student loan scheme, administered by the ATO. It allows eligible students at Commonwealth-supported places to defer their student contribution amounts (and eligible fee-paying students to take out HELP loans) and repay through the tax system. Unlike standard loans, HECS-HELP carries no interest rate — instead, the outstanding balance is indexed annually to CPI, applied on 1 June each year. This means the real cost of HECS-HELP debt depends on whether your compulsory repayments are reducing the balance faster than CPI indexation is increasing it. In periods of low inflation (CPI around 2-3%), HECS-HELP is relatively cheap and may not be a priority for voluntary repayments. In periods of high inflation (such as 2022-23, when CPI indexation was around 7%), the balance can grow significantly before repayments bring it down. The 2023 government reforms removed the previous 10% voluntary repayment bonus (it was eliminated in 2017) and introduced new rules limiting the number of units students can defer fees for. HECS-HELP debt dies with the debtor — there is no obligation to repay from your estate, and it does not affect your credit score or credit file (unlike commercial loans). However, it does reduce your disposable income and affects your borrowing capacity for home loans, as lenders include HECS repayments in their serviceability assessments.
HECS-HELP debt is not charged interest in the traditional sense. Instead, the outstanding balance is indexed annually to the Consumer Price Index (CPI) on 1 June each year, maintaining the real value of the debt in purchasing-power terms. This is fundamentally different from a loan with a fixed or variable interest rate — it means the debt grows roughly in line with inflation, rather than at a compounding interest rate. In low-inflation environments, HECS-HELP is very cheap; in high-inflation periods, the annual indexation can be substantial.
No — compulsory repayments only apply once your repayment income exceeds the minimum threshold (A\$54,434 for 2024-25). If your income is below this threshold in a given year, no compulsory repayment is required, though your balance will still be indexed to CPI on 1 June. If you were previously having HECS-HELP repayments withheld from your salary but your income fell below the threshold (for example, due to reduced hours or a career break), you can claim back any over-withheld amounts through your tax return.
Yes — while HECS-HELP is not recorded on your credit file and does not affect your credit score, lenders in Australia include your compulsory HECS-HELP repayments in their serviceability assessments when calculating your borrowing capacity. The compulsory repayment reduces your effective net income, which in turn reduces the loan amount you can service. The impact is roughly proportional to your income and HECS-HELP repayment rate — for example, a A\$1,300 annual compulsory repayment on a A\$65,000 salary reduces monthly disposable income by about A\$108, which modestly reduces borrowing capacity.
Yes — voluntary repayments can be made at any time via your ATO online services or myGov account, with a minimum voluntary repayment of A\$500. Voluntary repayments directly reduce your outstanding balance. As of 2017, the previous 5% bonus for voluntary repayments was discontinued. Whether making voluntary repayments is financially optimal depends on whether the CPI indexation rate on your debt exceeds the after-tax return you could achieve by investing the same funds elsewhere.
HECS-HELP debt is extinguished upon the death of the debtor — it does not form part of the estate and cannot be inherited by family members. If you become permanently incapacitated and are unable to work, you may be eligible for a HECS-HELP debt waiver. These provisions make HECS-HELP fundamentally different from commercial debt and are part of what makes it an income-contingent (rather than credit-based) loan scheme.
Yes — the ATO adjusts the repayment income thresholds and sometimes the repayment rates annually, typically with effect from 1 July of each income year. Indexation rates (applied 1 June) also change annually, reflecting actual CPI movements from the previous financial year. This calculator uses 2024-25 thresholds (example — check the ATO website for the most current year's thresholds and indexation rate before relying on any projection).
Disclaimer: The information, thresholds, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial or taxation advice. HECS-HELP repayment thresholds, indexation rates, and rules change annually — the figures used are examples based on 2024-25 ATO data and may not reflect current rates. Always refer to the ATO website or contact the ATO for current HECS-HELP repayment information. Consult a qualified financial adviser or tax agent for advice specific to your circumstances.