Take a graduate with a repayment income of $75,000 and a HECS-HELP balance of $30,000 in 2026-27. That income lands in the band starting at $70,889, which carries a 3.5 percent rate, because the next band up does not begin until $75,141, just above this salary. The key thing to understand is that the rate applies to the whole repayment income, not only the amount over a threshold. So the compulsory repayment is $75,000 times 3.5 percent, which is $2,625 for the year, withheld through PAYG. At that rate, ignoring indexation, a $30,000 balance would take about 11.4 years to clear. A small pay rise to $75,141 would lift the rate to 4 percent and the repayment to about $3,006, so the jump between bands can be sharp.
Item
Value
How it is calculated
HECS-HELP has no interest, but the balance is indexed to inflation each year. Compulsory repayments start once your repayment income passes the first threshold, $51,550 in 2026-27, and step up through 18 income bands to a maximum of 10 percent above about $151,200. The calculator finds the highest band whose threshold your income meets, then applies that single rate to your entire repayment income, which is how the system actually works. Because the rate covers the whole income rather than the slice above the threshold, crossing into a higher band raises your repayment by a noticeable step. The years-to-clear figure simply divides your balance by the annual repayment and ignores future indexation and income growth, so treat it as indicative.
Frequently asked questions
When do I start repaying?
Once your repayment income exceeds $51,550 (2026-27), 1% becomes compulsory. The rate steps up through 18 income bands to a maximum 10% above $151,200. Withheld via PAYG by your employer.
Is HECS-HELP charged interest?
No, HECS-HELP does not accrue interest. Instead, your outstanding balance is indexed to inflation each June 1 using the Consumer Price Index (CPI). This means the real value of the debt stays roughly constant, but the dollar amount grows when inflation is above zero.
What counts as repayment income?
Repayment income is your taxable income plus any total net investment losses, reportable fringe benefits, and reportable employer super contributions. It is broader than your salary alone. The ATO calculates this figure from your tax return each year.
Can I make voluntary repayments to reduce my balance?
Yes, you can make extra voluntary repayments at any time through ATO online services or by contacting the ATO directly. Voluntary repayments reduce your indexed balance immediately. There is no bonus or discount for doing so, but paying down the balance before the June 1 indexation date can save you the inflation uplift on the amount repaid.