HECS Repayment Calculator FY2026-27

On 1 June each year the ATO adds indexation to the part of your loan that has been unpaid for more than 11 months. The rate is the lower of CPI and wage price growth: 2.8% in 2026, 3.2% in 2025, 4% in 2024, 3.2% in 2023. It's a straight percentage of the balance being indexed, with no interest compounding during the year: the ATO's own example indexes a $10,000 loan at 3.2% on 1 June 2025 to $10,320, and a $90,000 loan picks up $2,880. Timing matters because your compulsory repayment for an income year is only credited when you lodge that year's tax return, after 30 June, so it can't reduce the indexation applied on the 1 June before it. A voluntary repayment that reaches the ATO before 1 June does (allow about 4 business days for it to be processed).

They clear the debt sooner and cut the indexation you pay, and nothing else: there's no discount for paying early, voluntary repayments aren't tax deductible, and they can't be refunded. On this page's example (a $25,000 balance and $85,000 salary, indexation at 2.8% a year), compulsory repayments alone clear the loan in 15 income years with $5,604 of indexation added along the way. Adding $2,000 a year in voluntary repayments clears it in 7 years with $2,335 of indexation, $3,270 less. That saving is the whole return on the money, so compare it with what the same money would do in an offset account or super; with indexation at the lower of CPI and wages growth it's often a modest return.

From the 2025–26 income year, compulsory repayments moved from a flat percentage of your WHOLE repayment income to a marginal system — you only repay on the slice of income above the minimum threshold, the same shape as income tax brackets. For FY2026-27 that threshold is $69,528: below it you repay nothing, and above it the rate rises in steps (currently 15%, then 17%, then a flat 10% of your total repayment income once you're well above the threshold). The thresholds are indexed each year in line with average weekly earnings, which is why the FY2026-27 threshold is higher than FY2025-26's $67,000.

Yes. The Australian Government applied a one-off 20% reduction to eligible HELP, VET Student Loan, ABSTUDY Student Start-up Loan and other study/training support loan balances that existed on 1 June 2025, and the ATO has confirmed that processing is complete. That is a separate change from the one this calculator models: the 20% cut reduced loan BALANCES, while the marginal system described above changed how much you repay each year. This calculator asks you to enter your current balance (after any reduction already applied), so you don’t need to re-apply the 20% cut yourself.

Once your repayment income for the year is above the minimum threshold — $69,528 for FY2026-27. Your compulsory repayment is worked out when you lodge your tax return and appears on your notice of assessment; it isn't something you separately apply for. If your repayment income stays at or below the threshold, your compulsory repayment for that year is nil, even if you still owe a balance — though the balance itself is still indexed each year while it remains unpaid. Note the threshold applies to repayment income, not just taxable income: reportable fringe benefits, reportable super contributions and some other amounts are added back (see the repayment-income question below), so it's possible to be under the threshold on taxable income alone but over it once those are counted.

Under the FY2026-27 marginal system you repay on the slice of repayment income above the $69,528 threshold, not on the whole amount. On $70,000, the slice above the threshold is only $472, so the compulsory repayment is about $71 for the year. On $85,000 it is $2,321, and on $100,000 it is $4,571 — each is 15% of that income's slice above the threshold. At $150,000 part of the income falls into the 17% tier and the repayment is $12,476; above $186,051 the calculation stops being marginal altogether and becomes a flat 10% of TOTAL repayment income (for example, $20,000 on $200,000). Every figure here is computed by the same engine as the calculator above — enter your own income for your exact amount.

No. From $186,051 the FY2026-27 repayment stops being marginal and becomes a flat 10% of your TOTAL repayment income, but the two methods meet almost exactly at the line: on $186,050 the marginal calculation gives $18,604.61, and on $186,051 the flat 10% gives $18,605.10, a difference of $0.49. What changes is how much each extra dollar costs you. Inside the 17% tier, an extra $1,000 of repayment income (say from $150,000 to $151,000) adds $170.00 to the repayment; above the switchover, the same extra $1,000 (from $200,000 to $201,000) adds $100.00, because only the flat 10% applies to it. Enter incomes either side of the threshold in the calculator above to see both.

Not exactly — compulsory repayments are calculated on "repayment income", which starts from your taxable income and adds back several amounts: reportable fringe benefits, total net investment loss (including net rental property losses), reportable super contributions, and exempt foreign employment income. Two practical consequences follow. Salary sacrificing into super lowers your taxable income but NOT your repayment income, because reportable super contributions are added straight back — so it doesn't shrink your HECS repayment the way it shrinks your income tax. And a negatively geared property doesn't reduce your repayment either, because the net investment loss is added back too. The calculator above starts from your salary, works out your taxable income, and adds those amounts back for you if you enter them under "More options"; the only add-back it doesn't ask about is exempt foreign employment income.

Using the ATO's own example: on a $80,000 repayment income in FY2025-26, the OLD flat-percentage system charged $2,800 (3.5% of the whole $80,000). Under the NEW marginal system introduced that same year, the same income instead pays $1,950 — 15% of just the $13,000 above the $67,000 threshold. That's roughly $850 less for the year, an example of why most borrowers pay less under the new system than they would have under the old one at the same income.

Both, in a sense, but they work differently. If you've told your employer about your study loan (on your TFN or withholding declaration), they withhold an extra amount from every pay under the PAYG withholding system, alongside your regular income tax withholding. But that withheld amount just sits with the ATO — it is NOT applied to your loan balance pay by pay. Your actual compulsory repayment is only calculated once, when you lodge your tax return, and is applied to your loan balance as a single lump sum at that point (with any over-withheld amount refunded to you, tax debts permitting).