How HECS-HELP Debt & Repayments Are Calculated
Many Australians are surprised at tax time when they receive a bill because of their HECS-HELP debt.
Even if your employer is withholding tax correctly, HECS can create an unexpected shortfall.
Here’s why.
How HECS repayments work
HECS repayments are:
income based
not interest bearing (indexed only)
collected through the tax system
Once your income passes the annual threshold, compulsory repayments apply.
2025–26 thresholds (approx.)
Taxable Income Repayment Rate
$54,000 1%
$70,000 3%
$90,000 5%
$120,000+ 7–10%
So if you earn $100,000, you may owe around $5,000 extra tax purely for HECS.
Why people get caught out
Common problems:
second jobs
bonuses
investment income
crypto gains
capital gains
These increase your taxable income, pushing you into higher HECS brackets.
But employers usually only withhold based on your salary — not total income.
Tips to avoid a bill
✔ Ask payroll to withhold extra
✔ Put aside 5–8% of bonuses
✔ Estimate early with your accountant
✔ Make voluntary payments if close to clearing debt
Key takeaway
HECS is effectively an extra tax rate, so planning ahead avoids surprises.
If you’d like a personalised estimate of your HECS repayment this year, we’re happy to calculate it for you.