HECS-HELP Repayment Calculator 2026-27: Thresholds & Rates

Q: What is the HECS repayment threshold for 2026-27?

The minimum repayment threshold for 2026-27 is $69,528. If your repayment income is at or below that, you make no compulsory repayment. Above it you pay 15 cents for every dollar over $69,528, and if you earn more than $129,717 you pay $9,028 plus 17 cents for every dollar above that. The thresholds are indexed each year.

Q: How much HECS do I pay on $85,000?

About $2,321 for the year - roughly $193 a month or $89 a fortnight. That is 15% of the $15,472 you earn above the $69,528 threshold. Under the marginal system introduced in 2025-26, you only repay on the income above the threshold, not on your whole salary.

Q: Is HECS interest-free?

Yes - a HECS-HELP debt charges no interest. Instead it is indexed once a year on 1 June to keep pace with the cost of living, and the indexation rate is based on the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI), so your debt cannot grow faster than wages.

Q: Has the 20% HECS debt reduction been applied?

Yes. The government legislated a one-off 20% cut to student loan debts, applied to balances as they stood on 1 June 2025 and before that year's indexation, with the 2025 indexation then recalculated on the lower balance. The ATO has completed processing it, so your balance should already reflect the reduction - check it via myGov.

Q: Should I pay off my HECS debt early?

There is no longer any bonus for voluntary repayments. HECS is the cheapest debt you will ever have - no interest, repayments tied to your income, and it is wiped when you die - so paying off higher-interest debt or saving a home deposit is usually a better use of spare cash. Paying it down can make sense if you have no other debt, or if it is limiting your home-loan borrowing capacity. This is general information, not financial advice.

Q: Does a HECS debt affect getting a home loan?

Yes. Lenders count your compulsory HECS repayment as an ongoing commitment when assessing serviceability, so it can reduce how much you are able to borrow even though it charges no interest. If you are close to clearing the balance, some lenders take a more flexible view - ask your broker or bank how they treat it.

Q: What happens to my HECS debt if I move overseas?

It does not go away. If you go overseas for 183 days or more in any 12-month period you must notify the ATO (generally within 7 days of leaving) and lodge a worldwide income report each year. Compulsory repayments are then worked out on your worldwide income against the same thresholds, and the debt continues to be indexed each June.

Q: Does salary sacrificing reduce my HECS repayment?

No. Your repayment is based on your repayment income, which is your taxable income plus add-backs including reportable super contributions, reportable fringe benefits and net investment losses. Salary-sacrificed super and packaged benefits get added back, so they do not lower your HECS repayment - though legitimate work-related deductions can.

Q: What happens if I never earn enough to repay my HECS?

Then you never make a compulsory repayment. HECS is income-contingent, so if your income stays below the threshold you owe nothing each year, and the balance is simply indexed. Any remaining debt is wiped when you die - it is not passed to your family or estate. It cannot bankrupt you.

HECS-HELP Repayment Calculator 2026-27: Thresholds, Rates & How Much You Pay

If you have a HECS-HELP debt, the rules changed dramatically in 2025 – and most people still do not realise how much better off they are. Repayments now work on a marginal system, meaning you only repay a percentage of the income you earn above the threshold, not a percentage of your whole salary. On top of that, the government cut 20% off every student loan debt. This guide explains exactly how HECS repayments work in 2026-27, gives you a calculator to work out your own repayment in seconds, and covers indexation, voluntary repayments and what happens if you move overseas.

HECS in 2026-27, in one box

You repay nothing if your repayment income is $69,528 or less. Above that, you pay 15 cents for every dollar over $69,528 – and if you earn over $129,717, it is $9,028 plus 17 cents for every dollar above that. Because the system is marginal, a small pay rise no longer triggers a huge repayment jump. Your debt has also been cut by 20% (applied to balances as at 1 June 2025), and it is indexed each 1 June by the lower of CPI or wage growth – there is no interest.

What Is HECS-HELP and How Does It Work Now?

HECS-HELP is the Australian Government loan that covers your university tuition if you are a Commonwealth-supported student. You do not pay anything upfront; instead the debt sits with the Australian Taxation Office and you repay it through the tax system once you earn above a threshold. It is one of the most forgiving student loan systems in the world: there is no interest, repayments are income-contingent (they stop if your income drops), and nothing is owed if you earn under the threshold.

Your HECS-HELP debt is grouped with other government study loans – FEE-HELP, VET Student Loans, SA-HELP, OS-HELP and the old SFSS – into a single combined balance the ATO calls a study and training support loan (STSL). They are all repaid together through the same system.

The two big changes from 2025

A marginal repayment system. From the 2025-26 income year, your compulsory repayment is calculated only on the income above the threshold. Under the old system, crossing a threshold meant a percentage applied to your entire income – so earning one dollar more could cost you thousands. That cliff is gone.
A 20% debt reduction. The government legislated a one-off 20% cut to student loan debts, applied to balances as at 1 June 2025 (before that year’s indexation). The ATO has completed processing it, so your balance should already reflect the cut.

Together, these changes mean lower balances and gentler repayments. Below, work out exactly what you will pay.

HECS-HELP Repayment Calculator (2026-27)

Enter your repayment income to see exactly what you will repay this financial year. Add your current debt balance and expected pay rises to project how long it will take to clear.

Your repayment income (per year)

Taxable income + reportable fringe benefits, super & investment losses

Current HELP debt (optional)

Your balance after the 20% reduction

Expected pay rise (% a year)

Used for the payoff projection

Your compulsory repayment this year

Per month

Per fortnight

Effective rate

Time to clear

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2026-27 thresholds and rates

Repayment income	What you repay
$69,528 or less	Nothing
$69,529 – $129,717	15c for every dollar above $69,528
Above $129,717	$9,028 + 17c for every dollar above $129,717

For reference, the marginal system began in 2025-26 with a minimum threshold of $67,000. The thresholds are indexed each year, so they rise over time.

How Your Repayment Is Actually Calculated

It's based on "repayment income", not just your salary

This is the detail that catches people out. The ATO does not use your salary – it uses your repayment income, which is broader. It is your taxable income plus several add-backs:

Your taxable income (income after allowable deductions)
Reportable fringe benefits (for example a salary-packaged car)
Reportable super contributions (extra salary-sacrificed super)
Net investment losses (such as a negatively geared property)
Exempt foreign employment income

This is why salary sacrificing into super or negatively gearing does not reduce your HECS repayment – those amounts get added back. On the flip side, legitimate work-related deductions lower your taxable income and therefore can reduce your repayment.

The marginal system, with worked examples

Under the new system you only repay on income above the threshold. Three examples using the 2026-27 rates:

Repayment income $65,000: below the $69,528 threshold, so you repay nothing.
Repayment income $85,000: 15c on the $15,472 above the threshold = about $2,321 for the year (roughly $89 a fortnight).
Repayment income $150,000: $9,028 (the 15c portion) plus 17c on the $20,283 above $129,717 = about $12,476.

Notice how gentle the ramp is at the bottom. Under the old system, nudging just over a threshold applied a percentage to your entire income, so a tiny pay rise could cost you thousands. The marginal system removed that cliff entirely – one of the most welcome reforms in years.

How you actually pay it

If you are an employee, you tick the box on your tax file number declaration saying you have a study loan, and your employer withholds extra tax from each pay to cover it. That money is not applied to your debt straight away – it sits as tax withheld, and your actual compulsory repayment is calculated when you lodge your tax return, then applied to your loan. If too much was withheld you get it back as part of your refund; if too little, you may have a bill.

Tell your employer you have a HECS debt

If you do not declare your study loan on your tax file number declaration, your employer will not withhold enough tax – and you can end up with a nasty bill at tax time when the ATO calculates your compulsory repayment. Always tick the study loan box. If you have multiple jobs, be aware that each employer withholds based only on what they pay you, so your combined income can push you over a threshold and leave you short.

Indexation, the 20% Debt Cut, and How Your Balance Changes

There's no interest – but there is indexation

A HECS-HELP debt charges no interest. Instead, it is indexed once a year on 1 June so it keeps pace with the cost of living. Indexation applies to the part of your debt that has been outstanding for 11 months or more.

Crucially, the indexation rate is now based on the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). This was a deliberate reform: it means that if prices spike but wages do not, your debt is indexed at the gentler wage rate rather than the harsher inflation rate. It removed the risk of your debt ballooning faster than your ability to repay it.

The 20% debt reduction

The government legislated a one-off cut of 20% off all student loan debts. It applies to your balance as it stood on 1 June 2025, and importantly it was applied before that year’s indexation – with the 2025 indexation then recalculated on the new, lower balance. The ATO has completed processing this for all study and training support debts, so your balance should already show the reduction.

What that means in practice: a $30,000 debt was cut by $6,000 to $24,000, and a $50,000 debt by $10,000 to $40,000 – before any indexation was applied. You did not need to apply for it; it happened automatically. If you have not looked at your balance in a while, log into myGov and link the ATO to see it.

How your balance moves each year

1 June: indexation is applied, increasing the balance slightly.
When your tax return is processed: your compulsory repayment for the year is calculated and applied, reducing the balance.
Any voluntary repayments you make reduce the balance immediately.

The timing trick: pay before 1 June

Money withheld from your pay does not reduce your debt straight away – it is only credited when your tax return is processed, which is usually after 1 June. That means indexation can be applied to a balance that does not yet reflect a year of your repayments. If you want to blunt that, a voluntary repayment made before 1 June reduces the balance that gets indexed. Whether that is worth doing depends on your circumstances – see the next section.

One last thing worth knowing: a HELP debt is wiped when you die – it is not passed on to your family or taken from your estate. It is a debt tied to you and your income, and nothing more.

Voluntary Repayments, Going Overseas, and Common Traps

Should you pay it off early?

You can make voluntary repayments at any time, but there is no longer any bonus or discount for doing so. Weigh it up honestly:

In favour: a voluntary repayment before 1 June reduces the balance that gets indexed, clears the debt sooner, and lifts your borrowing capacity for a home loan.
Against: HECS is the cheapest debt you will ever have – no interest, income-contingent, and it disappears if you die. That money, once paid, is gone. If you have a credit card, car loan or any higher-interest debt, paying that off first is almost always the better move. Saving a home deposit may also matter more.

For most people, aggressively paying down HECS is not the highest-value use of spare cash – but it can make sense if you have no other debt, or if a lender has told you your HECS repayment is holding back your borrowing capacity. This is general information, not financial advice; consider your own circumstances or speak to a licensed adviser.

HECS and getting a home loan

This one surprises people. Lenders count your compulsory HECS repayment as an ongoing commitment when assessing how much you can borrow, so a HELP debt can reduce your borrowing capacity even though it costs you no interest. If you are close to paying it off, some lenders take a more flexible view – it is worth asking your broker or bank how they treat it before you decide whether to clear the balance.

If you move overseas

Leaving Australia does not make your HECS debt go away, and there are obligations you must meet.

Your overseas HECS obligations

If you move overseas for 183 days or more in any 12-month period, you must notify the ATO (generally within 7 days of leaving) and then lodge a worldwide income report each year. Your compulsory repayment is worked out on your worldwide income against the same thresholds, so earning above the threshold overseas still means repayments. Meanwhile the debt keeps being indexed each June. Ignoring this does not make it disappear – it just builds a problem for when you return.

Common traps

Not declaring your loan to your employer – too little tax is withheld and you cop a bill at tax time.
Multiple jobs – each employer withholds only on what they pay you, so your combined income can push you over the threshold and leave you short.
Assuming salary sacrifice helps – reportable super and fringe benefits are added back into repayment income, so they do not reduce your repayment.
Forgetting your overseas obligations – the reporting requirement applies whether or not you think about it.
Panicking about the debt – if you never earn above the threshold, you never make a compulsory repayment, and the debt is wiped when you die. It is not a debt that can bankrupt you.

Frequently Asked Questions

What is the HECS repayment threshold for 2026-27?

How much HECS do I pay on $85,000?

Is HECS interest-free?

Has the 20% HECS debt reduction been applied?

Should I pay off my HECS debt early?

Does a HECS debt affect getting a home loan?

What happens to my HECS debt if I move overseas?

Does salary sacrificing reduce my HECS repayment?

What happens if I never earn enough to repay my HECS?

See more in Money & Banking and our Study in Australia guides.

Final Thoughts

HECS-HELP is a genuinely fair loan: no interest, repayments tied to what you earn, and nothing owed while your income is low. With the marginal system and the 20% debt cut, it is more manageable than ever. Know your threshold, understand what counts as repayment income, keep an eye on indexation each June, and you can plan around it with confidence.