ATO Payday Super Changes
Since 1 July 2026, employers must pay super with each pay run. Contributions have to reach the fund within seven business days of payday.
Learn MoreHECS-HELP Repayment in Australia:
Complete 2026-27 Guide
Your HECS-HELP debt is repaid automatically through the tax system once your income crosses the threshold. But knowing exactly how much you'll repay, and how indexation affects your balance, can make a big difference to your financial planning.
Written by Rob, founder of AusCalc
Australian small business owner. Checked against current ATO published rates. Updated July 2026. About AusCalc
How HECS-HELP Repayment Works
HECS-HELP repayments are made through the Australian tax system, rather than as a separate monthly bill like a commercial loan. This means your repayment capability is tied directly to your income.
If you indicate you have a study debt on your tax file declaration, your employer will withhold additional tax from your wages. However, the ATO only calculates your actual compulsory repayment once you lodge your tax return at the end of the year.
If your employer withheld more than needed, you'll receive a refund; if they didn't withhold enough, you may face a tax bill for the difference.
2026-27 Repayment Thresholds and Rates
From 2025-26, repayments use a marginal system: you only repay on the portion of your repayment income (taxable income plus reportable fringe benefits, reportable super contributions and total net investment losses) above each threshold, not on the whole amount.
| Repayment Income | Repayment Rate |
|---|---|
| $0 - $69,528 | Nil |
| $69,528 - $129,717 | 15c for each $1 over $69,528 |
| $129,717 - $186,051 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of total repayment income |
HECS Indexation Explained
While HECS-HELP is technically "interest-free," it is subject to indexation on 1 June every year to keep up with the cost of living.
The ATO applies indexation to the portion of your debt that has remained unpaid for more than 11 months. For example, if you owe $30,000 and the indexation rate (CPI) is 4%, your balance will increase by $1,200 overnight.
Your HECS debt can grow faster than you repay it in high-inflation years. In 2023, indexation added 7.1% to balances, adding thousands to many graduates' balances overnight.
Strategy Tip: Because indexation is applied on 1 June, making a voluntary repayment in May can reduce your balance before the indexation hits, potentially saving you hundreds in "interest" costs.
HECS and Home Loans
When you apply for a mortgage, banks don't just look at the size of your HECS debt; they look at the impact on your cash flow.
Lenders treat the compulsory HECS repayment as a recurring financial liability. For example, on a $95,000 income in 2026-27, your repayment is approximately $3,820.80 per year (~$318.40 per month). This reduces your net disposable income, which in turn reduces your maximum borrowing capacity.
Tip: If you are close to your borrowing limit, paying off the remainder of your HECS debt before applying for a loan can sometimes significantly increase the amount a bank is willing to lend you.
Voluntary Repayments
You can make voluntary repayments to the ATO at any time via myGov or online banking. The minimum voluntary repayment is $500.
Note that the 5% bonus for voluntary repayments was removed in 2022. Today, the main benefit of voluntary repayments is reducing the total debt faster and avoiding annual indexation.
View ATO Voluntary Repayment GuideHECS for Sole Traders
Sole traders must account for their HECS repayment themselves. Unlike an employee whose boss takes the extra tax out each week, a sole trader's HECS repayment is calculated as a lump sum when they lodge their tax return.
It is vital for sole traders to factor their HECS obligation into their quarterly tax savings or PAYG instalments to avoid a "tax shock" at year-end.
Combine your HECS planning with our Sole Trader Tax Calculator to get a complete picture of your 2026-27 obligations.
Related Calculators
Regulatory Notice:
Standard ATO estimates only; consult a professional before acting. For more details, see our Disclaimer.