HECS Repayment Calculator Australia 2026-27

How Are HECS Repayments Calculated?

HECS repayments are calculated using a marginal rate system that applies tiered rates only to income above the $69,528 threshold in FY2026-27.

The Australian Tax Office determines your "repayment income" by adding your taxable income, net investment losses, reportable fringe benefits, reportable super contributions, and exempt foreign employment income. This repayment income figure — not your gross salary alone — dictates the HECS calculation applied to your tax return.

Step-by-Step HECS Calculation (2026-27)

1. Determine your repayment income for the financial year (taxable income + add-back amounts).
2. Compare it to the minimum threshold of $69,528. At or below this amount, your compulsory repayment is $0.
3. For income between $69,529 and $129,717, apply a marginal rate of 15 cents per dollar on the amount above $69,528.
4. For income between $129,718 and $186,050, the repayment is $9,028 plus 17 cents per dollar above $129,717.
5. For income of $186,051 and above, the repayment is 10% of total repayment income.

Worked Example: HECS on $85,000

A graduate earning $85,000 per year has $15,472 of income above the $69,528 threshold. The HECS repayment calculation is:

Use our Pay Calculator to see how this HECS repayment fits into your complete after-tax income breakdown, including income tax brackets, the Medicare levy, and superannuation.

HECS Repayment Rates 2026-27

The HECS repayment threshold for FY2026-27 is $69,528, up from $67,000 in FY2025-26. Repayment thresholds are indexed at the start of each financial year. See our news coverage of the 2026-27 HECS repayment threshold for how it was set and what it means for borrowers.

Repayment income includes your taxable income plus net investment losses, reportable fringe benefits, reportable super contributions, and exempt foreign employment income. These thresholds apply to all "Study and Training Support Loans" including HECS-HELP, FEE-HELP, VET Student Loans, and SA-HELP.

HECS Repayment Threshold by Year

Why Your Payslip HECS Deduction Differs From Your Actual Repayment

The HECS amount withheld from each pay is an estimate, not your final repayment. Employers withhold an additional PAYG component — labelled STSL on most payslips — using ATO withholding schedules based on that pay period's earnings.

Your actual compulsory repayment is only calculated when you lodge your tax return, using your full-year repayment income. If your pay varied during the year, or you had deductions, investment income, or reportable super, the amount withheld will not match the assessed amount — the difference is settled through your tax refund or bill.

See our full guide to STSL on your payslip for how the withholding is calculated, a worked payslip example, and how to stop STSL deductions once your loan is paid off.

Who Uses This HECS Repayment Calculator?

Over 3 million Australians hold a HELP debt, making this calculator relevant to a significant share of the workforce.

• Recent graduates starting their first full-time job and estimating how HECS reduces their take-home pay after tax.
• Mid-career professionals approaching a pay rise who want to understand how higher income increases their compulsory HECS repayment under the marginal rate system.
• Mortgage applicants needing to calculate how HECS repayments reduce borrowing capacity — lenders subtract compulsory HECS from assessable income.
• Salary negotiators comparing a job offer's gross salary to the actual net pay after income tax, Medicare levy, and HECS deductions.
• Part-time workers and contractors with variable income who need to check whether they cross the $69,528 threshold in a given financial year.

Pair this tool with our Income Tax Calculator to see the combined effect of income tax brackets, the Medicare levy, and HECS on your after-tax income.

How Does HECS Affect Your Take-Home Pay?

HECS reduces your take-home pay by between $15.79 and $145.60 per week for salaries between $75,000 and $120,000.

At $65,000 and $69,528, no compulsory HECS repayment applies because income sits at or below the $69,528 threshold. The jump from $69,528 to $72,000 costs only $371 in HECS ($7.13/week) — a key benefit of the marginal rate system. Take-Home Pay Calculator provides a full net pay breakdown at any salary. HECS figures use the FY2026-27 schedule; income tax and Medicare use the site's current tax engine.

What Has Changed in HECS-HELP Recently?

Two major reforms landed in the past two years: a one-off 20% reduction of all HELP debt balances (legislated in 2025 and applied automatically by the ATO), and the switch from flat-rate to marginal-rate repayments from FY2025-26 — the biggest reform to HECS repayments in 35 years.

How Does the New Indexation Cap Work?

HECS debts are indexed on 1 June each year at the lower of CPI or the Wage Price Index (WPI). The government introduced this cap after CPI-based indexation hit 7.1% in June 2023, adding thousands of dollars to outstanding balances overnight. The cap was backdated to June 2023, reducing that year's indexation to 3.2%. On 1 June 2026, HELP debts were indexed at 2.8% — read more on HECS indexation 2026.

Voluntary repayments made before 1 June reduce the balance before indexation is applied. Use our Superannuation Calculator to compare whether extra super contributions or HECS repayments offer better long-term value.

What Are Common HECS Mistakes?

The most common HECS mistake is not ticking the HELP debt box on the Tax File Number declaration, which causes a large tax bill at end of financial year instead of regular PAYG withholding.

1. Forgetting to declare the HELP debt to your employer. Your employer withholds HECS through PAYG (the STSL component on your payslip) only if you indicate a HELP debt on your TFN declaration. Failing to tick this box means zero withholding during the year and a lump-sum bill of $1,571 or more at tax time on an $80,000 salary.
2. Using gross salary instead of repayment income. Repayment income adds back net investment losses, reportable fringe benefits, and reportable super contributions. A salary of $66,000 with $5,000 in reportable super pushes repayment income to $71,000 — above the $69,528 threshold.
3. Assuming salary sacrifice eliminates HECS. Reportable employer super contributions are added back to calculate repayment income. Salary sacrificing into super reduces taxable income but has limited effect on HECS repayments.
4. Making voluntary repayments while holding higher-interest debt. HECS is indexed at CPI or WPI (2.8% in 2026), which is lower than credit card rates (15% to 22%), car loans (6% to 9%), and personal loans (7% to 14%). Pay those debts first.
5. Not timing voluntary repayments before 1 June. Indexation applies to the outstanding balance on 1 June. A voluntary repayment on 2 June reduces next year's balance but does nothing for the current year's indexation.

Should You Make Voluntary HECS Repayments?

Voluntary repayments reduce your HECS debt faster, but the financial benefit is limited because HECS is indexed to CPI or WPI — not charged market-rate interest. The 2026 indexation rate was 2.8%, well below a mortgage rate of 6% to 7%.

Which Related Calculators Help with HECS Planning?

HECS is one component of your total pay deductions. These Australian tax calculators provide the full picture of your salary, tax, and net pay.

• Pay Calculator — complete breakdown of gross salary to net pay including income tax, Medicare levy, superannuation, and HECS.
• Income Tax Calculator — see how income tax brackets apply to your salary and calculate your marginal tax rate.
• Take-Home Pay Calculator — calculate your after-tax income with or without a HELP debt factored in.
• HECS-HELP Guide — how the loan system works, indexation history, and repayment strategies in full detail.
• Salary Sacrifice Calculator — estimate the tax savings of salary sacrificing into superannuation and its limited effect on HECS repayments.
• Superannuation Calculator — calculate your employer SG contributions at the 12% rate.

Frequently Asked Questions