Australia HECS / HELP Calculator
Estimate your compulsory HECS-HELP repayment for the 2025–26 income year under the ATO marginal system, then project how indexation and voluntary payments change your payoff timeline.
Enter Your Loan Balance
Add your current HECS-HELP balance and select the income year. The 2025–26 system calculates compulsory repayments only on income above the AUD 67,000 threshold.
Add Your Repayment Income
Set your repayment income, which includes taxable income plus reportable fringe benefits, net investment losses, reportable super, and exempt foreign income. The calculator applies the 15c / 17c / 10% marginal bands.
Project Your Payoff
Adjust the indexation rate and any one-off voluntary payment to see your estimated balance and payoff timeline year by year.
AU HECS-HELP Calculator
2025–26 ATO marginal repayment system
Repayment Summary
2025–26Your HECS-HELP summary
A plain-English read of your 2025–26 compulsory repayment under the ATO marginal system, and how your balance changes once indexation is applied on 1 June.
Projected balance over time
A year-by-year projection of the loan balance using the inputs above. Each year the model applies any one-off voluntary repayment, then indexation, then the compulsory repayment. The 2025–26 thresholds are held constant for illustration; in practice the ATO indexes thresholds annually.
| Year | Opening | Indexation + | Repayment − | Closing |
|---|
2025–26 repayment bands
From the 2025–26 income year the ATO uses marginal rates. Your repayment is worked out only on the income within each band above the AUD 67,000 threshold. Source: ATO Repayment Thresholds and Rates ↗
| Repayment Income | Repayment on This Income | Position |
|---|
Indexation impact
Indexation is applied on 1 June each year to the balance unpaid for more than 11 months, at the lower of CPI or WPI. A voluntary repayment made before 1 June reduces the balance that is indexed. ATO indexation rates ↗
How HECS-HELP Repayments Work in Australia
A reference guide to the ATO's 2025–26 marginal repayment system, indexation, and the one-off 20% debt reduction — with worked examples. All figures verified against official ATO guidance.
The 2025–26 Reforms
The 2025–26 income year brought the biggest change to study and training loan repayments in a generation. Two reforms work together: a one-off 20% reduction of all eligible loan balances, and a new marginal repayment system.
The 20% reduction was applied automatically by the ATO to balances as they stood at 1 June 2025, before that year's indexation was added. From 1 July 2025, compulsory repayments are calculated only on the portion of repayment income above the AUD 67,000 minimum threshold, rather than as a flat percentage of total income. Most people repay less than under the old system, and some no longer make any compulsory repayment.
The reforms apply to all study and training support loans — HELP, HECS-HELP, VET Student Loan, Student Financial Supplement Scheme, Student Start-up Loan, and the Australian Apprenticeship Support Loan — under one set of thresholds and rates.
How Repayments Are Worked Out
The mechanics of the 2025–26 system, from what counts as income to how and when the ATO collects repayments.
Repayment Income
Repayment income is broader than salary. The ATO adds taxable income, reportable fringe benefits, total net investment loss, reportable super contributions, and exempt foreign employment income. This combined figure determines the repayment.
The Marginal System
Only income above AUD 67,000 is used for the first repayment tier. The first 15c per AUD 1 applies to income between AUD 67,001 and AUD 125,000, then 17c per AUD 1 to AUD 179,285, then 10% of total income above that.
When Indexation Applies
On 1 June each year the ATO indexes the part of the balance unpaid for more than 11 months. Indexation is based on ABS figures over the previous two years, using the lower of CPI or WPI. The 2026 rate is 2.8%.
PAYG Withholding
If an employer is aware of a study loan, extra amounts are withheld each pay through PAYG. The actual compulsory repayment is set when the tax return is lodged, and any over- or under-withholding is reconciled in the notice of assessment.
Key Comparisons
How the new system differs from the old, what loans are covered, and how compulsory and voluntary repayments compare.
2024–25 Flat-Rate vs 2025–26 Marginal System
| Repayment Income | Old (2024–25 flat rate of total) | New (2025–26 marginal) |
|---|---|---|
| AUD 70,000 | AUD 1,750 (2.5% of total) | AUD 450 |
| AUD 80,000 | AUD 3,200 (4.0% of total) | AUD 1,950 |
| AUD 100,000 | AUD 5,500 (5.5% of total) | AUD 4,950 |
| AUD 130,000 | AUD 10,400 (8.0% of total) | AUD 9,550 |
| AUD 150,000 | AUD 13,500 (9.0% of total) | AUD 12,950 |
Loan Types Covered by the Same Thresholds
| Loan | What It Covers | Repayment Order |
|---|---|---|
| HELP / HECS-HELP | Higher education student contributions and fees | 1st |
| VSL | VET Student Loan for vocational education | 2nd |
| SFSS | Student Financial Supplement Scheme (closed to new loans) | 3rd |
| SSL / ABSTUDY SSL | Student Start-up Loan | 4th / 5th |
| AASL | Australian Apprenticeship Support Loan (formerly Trade Support Loan) | 6th |
Compulsory vs Voluntary Repayments
| Factor | Compulsory | Voluntary |
|---|---|---|
| Trigger | Repayment income above AUD 67,000 | Any time, any amount |
| How it is paid | Through the tax return / PAYG | Direct payment to the ATO |
| Effect on indexation | Applied after indexation each year | Reduces the indexed balance if made before 1 June |
| Refundable | Not applicable | No |
Worked Examples
Illustrative 2025–26 calculations using the ATO's published examples. Figures are examples only and do not reflect any individual's circumstances.
Australian HECS-HELP News & Updates
Recent ATO, Department of Education and Treasury announcements affecting study and training loans — sourced from official government channels.
2026 Indexation Applied at 2.8%
The ATO applied indexation of 2.8% to study and training loan balances on 1 June 2026. Indexation is applied to the portion of a balance that has been unpaid for more than 11 months.
Key Changes
- Indexation rate for 2026 set at 2.8%
- Indexation is the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI)
- Applied to amounts that remained unpaid for more than 11 months as at 1 June 2026
Impact
The 2.8% rate is lower than the 3.2% applied in 2025 and the 4.0% applied in 2024.
Context
The ATO publishes the applicable indexation rate each year ahead of the 1 June indexation date.
Updated PAYG Withholding Tables for Study Loans
From 24 September 2025, the ATO updated the Study and Training Support Loans (STSL) PAYG withholding schedules so that amounts withheld from pay reflect the 2025–26 marginal repayment system.
Key Changes
- STSL withholding components updated to align with the new repayment thresholds and rates
- Employers apply the updated schedules to pay runs from the effective date
- Withholding is an estimate; the final compulsory repayment is calculated at tax assessment
Impact
Amounts withheld through the year may differ from the final compulsory repayment shown on a notice of assessment.
Context
The ATO publishes tax tables and withholding schedules, which employers use to set STSL amounts.
One-Off 20% Reduction Becomes Law
Legislation reducing the balance of study and training support loans by 20% received assent on 2 August 2025. The reduction is applied automatically by the ATO and does not require an application.
Key Changes
- A one-off 20% reduction applied to eligible study and training support loan balances
- Calculated on the balance as at 1 June 2025, before 2025 indexation was applied
- Applied automatically by the ATO; no application required
Impact
Eligible balances were reduced before indexation, lowering the amount that 2025 indexation was calculated on.
Context
The Department of Education provides details of who is eligible and how the reduction was applied.
New Marginal Repayment System for 2025–26
From the 2025–26 income year, compulsory repayments are calculated using marginal rates. The minimum repayment threshold rose to AUD 67,000, and repayments apply only to the portion of repayment income above the threshold.
Key Changes
- Minimum repayment threshold increased to AUD 67,000 (from AUD 54,435 in 2024–25)
- Repayments calculated only on income above the threshold (not on total income)
- 15c per AUD 1 from AUD 67,001 to AUD 125,000; AUD 8,700 plus 17c per AUD 1 from AUD 125,001 to AUD 179,285; 10% of total repayment income from AUD 179,286
Impact
Under the marginal system, compulsory repayments at most income levels are lower than under the earlier flat-rate system.
Context
The ATO note that its repayment calculator reflects the reduced compulsory repayments from 1 July 2026.
2025 Indexation Applied at 3.2% After the 20% Reduction
Indexation of 3.2% was applied to study and training loan balances on 1 June 2025. The one-off 20% reduction was applied to balances first, so indexation was calculated on the reduced amount.
Key Changes
- 2025 indexation rate set at 3.2% (lower of CPI or WPI)
- The 20% reduction was applied to the 1 June 2025 balance before indexation
- Both steps were applied automatically by the ATO
Impact
Applying the reduction first means indexation was charged on a smaller balance.
Context
Indexation maintains the real value of the loan and is not interest.
Indexation Reform: Lower of CPI or WPI
Legislation changed the indexation basis so that it is the lower of the Consumer Price Index or the Wage Price Index, with the change backdated to 1 June 2023. The ATO recalculated affected balances automatically.
Key Changes
- Indexation is now the lower of CPI or WPI
- 2023 indexation reduced from 7.1% to 3.2%
- 2024 indexation reduced from 4.7% to 4.0%
- The ATO calculated indexation credits and updated affected loan accounts automatically
Impact
Borrowers received indexation credits reflecting the lower backdated rates for 2023 and 2024.
Context
The ATO publishes the full indexation rate history, including the revised figures.
Repayment Thresholds Are Indexed Each Year
The minimum repayment threshold and the income points in the repayment scale are reviewed and indexed each income year. Updated figures for each year are published by the ATO.
Key Changes
- Thresholds and the repayment scale are set for each income year
- Figures for a new income year are published by the ATO before that year begins
- The 2025–26 minimum threshold is AUD 67,000
Impact
The threshold that applies depends on the income year being assessed.
Context
The current figures are available on the ATO repayment thresholds and rates page.
HECS-HELP — Frequently Asked Questions
Common questions about how study and training support loans are repaid, indexed, and reduced — verified against official ATO guidance.
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