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HECS Calculator — Australia 2025-26 (New Marginal System + 20% Cut)

By , Melbourne Read: 10 min Checked against: ATO, Study Assist

Pop your gross salary in below and you'll see exactly what you'll pay in HECS this year — annual, monthly, fortnightly and weekly. It's already rebuilt for the new marginal system that kicked in 1 July 2025 (nothing below $67k, 15c in the dollar from $67k–$125k, then bigger steps at $125k and $179,286) and the 20% HELP debt cut that was applied automatically on 1 June 2025. The ATO's own tool still spits out old 2024-25 numbers until July 2026, which is why I built this.

What changed for FY2025-26 — and why old calculators are wrong

Two legislated changes reshaped HECS repayments from 1 July 2025:

  1. New marginal repayment system. The old 18-bracket whole-of-income model was scrapped. Under the new system, compulsory repayment is calculated only on the income above $67,000 — except at the top bracket. That means a graduate earning $80,000 now pays roughly half what they would have paid under the old system on the same income.
  2. 20% HELP debt cut. The Higher Education Legislation Amendment (20% Reduction of HELP Debts) Act 2025 passed the Senate on 31 July 2025. The ATO applied a 20% cut to every outstanding HELP-family balance (HECS-HELP, FEE-HELP, OS-HELP, SA-HELP, STARTUP-HELP) before 1 June 2025 indexation ran. No application needed.

Many online calculators still run on the old thresholds. This one is rebuilt for the post-reform world, so the numbers you see here match what the ATO will actually withhold and assess in 2026.

FY2025-26 HECS repayment thresholds & marginal rates

Four brackets only, and the first one is $0. Below $67,000 in repayment income, there is no compulsory repayment. Above it, the rate applies only to the excess — not your whole salary, as it used to.

HECS-HELP repayment thresholds for FY2025-26 (effective 1 July 2025) — marginal system
Repayment incomeRepayment calculation
$0 – $67,000Nil — no compulsory repayment
$67,001 – $125,00015c for every $1 over $67,000
$125,001 – $179,285$8,700 + 17c for every $1 over $125,000
$179,286 and above10% of total repayment income (whole-of-income)

Big change from 2024-25: The new marginal system means repayment is calculated only on income above $67,000 (except at the top bracket). Under the old system, the rate applied to your entire income. Source: Australian Taxation Office — Repayment thresholds and rates 2025-26; Higher Education Legislation Amendment (20% Reduction of HELP Debts) Act 2025. Repayment income = taxable income + reportable fringe benefits + reportable super + net investment loss + exempt foreign employment income.

How the new calculation works — three worked examples

Example 1 — $80,000 salary

$80,000 sits in the first repayment bracket ($67,001–$125,000). The compulsory repayment is 15c × ($80,000 − $67,000) = 15c × $13,000 = $1,950 per year.

  • Annual: $1,950
  • Monthly: $162.50
  • Fortnightly: $75.00
  • Weekly: $37.50

Old system comparison: on the 2024-25 thresholds, $80,000 fell in the 4.0% whole-of-income bracket — that was $3,200 a year. The new system is $1,250 cheaper per year on the same salary.

Example 2 — $140,000 salary

$140,000 is in the second bracket. The formula is $8,700 + 17c × ($140,000 − $125,000) = $8,700 + $2,550 = $11,250 per year.

  • Annual: $11,250
  • Monthly: $937.50
  • Fortnightly: $432.69
  • Weekly: $216.35

Example 3 — $200,000 salary (top bracket)

At $179,286 or above, the 10% rate applies to your whole repayment income — the system reverts to whole-of-income at the top. $200,000 × 10% = $20,000 per year, or $769 per fortnight.

Bracket-jump warning

Moving from $124,999 to $125,001 doesn't double your repayment, but it does jump the marginal rate from 15c to 17c. At the very top bracket ($179,286+), you cross a cliff — the 10% applies to your whole income, so a tiny pay rise at that threshold can add over $1,000 in HECS overnight.

Gross income vs repayment income — what the ATO actually uses

The calculator works on repayment income, not gross salary or taxable income. Repayment income equals:

taxable income + reportable super contributions + reportable fringe benefits + net investment losses + exempt foreign employment income.

For most salaried employees with no investments, packaged benefits or salary sacrifice, repayment income is identical to taxable income. The distinction matters if you:

  • Salary sacrifice extra super — the sacrificed amount is added back (see our salary sacrifice + HECS guide).
  • Have a novated lease or other packaged benefit — the reportable fringe benefit amount is added back (salary packaging explainer).
  • Hold negatively-geared investment property — net rental losses are added back.
  • Work a second job or freelance — total both incomes for repayment income (multiple jobs calculator).

Employer withholding — why your payslip amount might not match this calculator

Once you tick the HELP box on your TFN declaration (or submit a Withholding Declaration, form NAT 3093), your employer starts withholding HECS from each pay. Under the new marginal system, employer withholding tables published by the ATO in July 2025 estimate the repayment based on each pay-cycle amount.

Employer withholding is an estimate. At tax time the ATO reconciles using your actual annual repayment income (including second-job income, investments and packaged benefits). If your employer under-withheld, you owe the difference. If they over-withheld, the excess is applied to your HELP balance — not refunded to you.

Common mistake: employees with multiple jobs typically under-withhold, because each employer treats their income as your only income. Always model total income with our multiple jobs calculator if you have more than one source.

Does the 20% HELP cut still apply to me?

Yes, if you had an outstanding HELP balance as at 1 June 2025. The ATO applied the 20% reduction automatically before processing 2025 indexation. You should have received an SMS or Letter from the ATO between November 2025 and early 2026 confirming the new balance.

Check your current balance via myGov → ATO → Loan accounts. If the balance shown is more than 20% below your peak balance (plus any compulsory repayments), the cut has been applied.

The cut does not apply to debt incurred after 1 June 2025 — new unit loads you take on from July 2025 onwards are full-value.

Can I reduce my compulsory repayment legally?

Yes — by reducing repayment income. Three levers work:

  • Maximise deductible work expenses. Anything that reduces taxable income (without adding a reportable item back) reduces repayment income. Home office, professional subscriptions, work-related travel, tools and education are the biggest levers.
  • Bring forward deductible expenses. If you're near a bracket boundary (e.g. $125,000), prepaying deductible expenses or making a concessional super contribution before 30 June can push you back into the lower bracket.
  • Investment losses. Negative gearing creates a deduction — but the loss is added back as reportable for HECS, so it rarely helps.

What does not work: salary sacrificing to super, novated leases, or most packaged benefits. They reduce your take-home pay without reducing repayment income. See our salary packaging + HECS explainer for the full matrix.

Want to pay the debt off faster? Use the voluntary repayment calculator to see whether a pre-1-June payment beats your alternative use of the cash.

How to check your HECS debt balance

The fastest way to check your current HECS-HELP balance is through myGov. Follow these steps:

  1. Log in to my.gov.au with your username and password.
  2. Link or select the Australian Taxation Office (ATO) service.
  3. Click Tax → Loan accounts from the top menu.
  4. Your current HELP account balance, year-to-date compulsory repayments and transaction history all appear here.

The balance shown includes the 20% HELP debt cut (processed late 2025) and any 2025 indexation already applied. If you made voluntary payments in the last 3–5 business days, wait for processing to complete before the new balance displays.

You can also check via the ATO app (iOS/Android) — log in with myGovID and tap "Loan accounts". The myHELPbalance.gov.au site lets you view balance history without logging in if you have your Commonwealth Higher Education Support Number (CHESSN) / USI.

What to check: confirm the 20% reduction appears as a separate line item in your transaction history (dated late Nov 2025 to Feb 2026), confirm 2025 indexation (3.2%) was applied on 1 June 2025 after the cut, and verify any voluntary payments you've made have been credited.

Will the 2026 HECS indexation increase my repayments?

No — indexation grows the loan balance, not the repayment amount. Your compulsory repayment is based on income, not balance. A bigger balance just takes longer to clear. The 2026 indexation rate will be announced by the ATO in late May 2026 and applied on 1 June 2026. See the indexation calculator for projections.

This is the main HECS repayment calculator for Australia. Related pages extend the calculation for specific situations:

Tips & Tricks

Pay off HECS faster — actionable tactics

Hand-picked strategies Australian graduates actually use. Each one can be implemented this financial year — no gimmicks, no affiliate links.

  1. 01

    Chuck a voluntary payment in before 1 June

    This one's the big one. Indexation hits on 1 June, and it only applies to whatever is sitting on your balance that day. If you transfer, say, $5,000 in the last week of May, indexation at 3.4% never touches that $5k — so you save around $170 in one go. I did this three years running and it's the single easiest win.

    Do this: Grab your PRN from myGov → ATO → Loan Accounts, then BPAY it. Do it 5 business days before 1 June — banks can be slow.

  2. 02

    Tick the HECS box on your TFN declaration

    Your employer only withholds extra tax for HECS if you tell them you have a debt. I've met grads who got smacked with a $9,000 bill at tax time because they never ticked the box — their payroll had no idea. Getting it withheld from each pay is way less painful than one brutal June invoice.

    Do this: Email payroll and say: "Please update my TFN declaration to indicate I have a HELP debt." Sorted next pay cycle.

  3. 03

    Add your fringe benefits and super to your income estimate

    The ATO uses "repayment income" — not just your salary. It adds back reportable fringe benefits (novated lease is the big one), reportable employer super, net investment losses, and exempt foreign income. A mate of mine on a $95k salary with a $12k novated lease tipped into the 15% bracket and was furious when the letter arrived.

    Do this: Check your last payment summary, grab the RFBA number, and add it to your gross before using the calculator.

  4. 04

    Don't part-pay your HECS before applying for a home loan

    This catches loads of people out. Banks only drop HECS from their serviceability calc when your balance is exactly zero. If you have $25k and pay $20k of it, the bank still assumes the full monthly commitment. Total waste unless you're clearing it completely — and if your balance is under $7–8k you might as well, since clearing it unlocks roughly $160 of borrowing capacity for every $1 of monthly HECS you remove.

    Do this: Balance under $8k and you're six months from a home loan? Clear it. Over $15k? Don't touch it — keep the cash for your deposit.

  5. 05

    If your investments beat indexation after tax, invest instead

    Indexation is capped at the lower of CPI or WPI — roughly 2.5–3.4% heading into 2026. A basic ASX/global ETF returning 7% pre-tax works out at about 4.8% after tax in the 32.5% bracket. Over 10 years, investing $20,000 instead of repaying it early can leave you $4,000–$7,000 ahead. HECS has no interest, just indexation — it's one of the cheapest "debts" you'll ever have.

    Do this: Run the numbers yourself in the Voluntary vs Invest calculator using your actual marginal tax rate before you decide.

  6. 06

    Don't expect salary sacrifice to shrink your HECS bill

    This is the most common bit of dodgy advice I hear. Yes, salary sacrificed super lowers your taxable income — but the ATO adds it back as "reportable super" when working out HECS. Novated leases reduce taxable income too, but they also create a Reportable Fringe Benefit (RFBA) that adds back in. Net effect: salary sacrifice is basically HECS-neutral. Use it for its super-tax benefits, not to dodge HECS.

    Do this: If someone tells you salary sacrifice will drop your HECS, ask them to show you the ATO page on repayment income. It won't.

  7. 07

    Moving overseas? Tell the ATO within 7 days

    Your HECS debt doesn't stay in Australia when you do. If you leave and earn above the AUD threshold ($67,000 for FY2025-26) you're still liable — and you have to lodge a worldwide income declaration each year. Skip it and you cop penalties plus interest. I've seen Aussies come back from London with five years of missed declarations and a $12k penalty bill on top.

    Do this: Before you fly, log into myGov → ATO → Update contact details → tell them you're moving. Lodge worldwide income by 31 October each year.

  8. 08

    Redirect your tax refund or bonus to HECS in May

    Lump-sum cash — your July tax refund, an annual bonus, EOFY commission — is the stuff that vanishes on random takeaway and holidays. If you route half of any big deposit straight to HECS in April or May, you wipe out a year of indexation on that chunk and you never miss the money because it was never in your everyday account.

    Do this: Set a rule with yourself: any single deposit over $2,000 in April or May gets split 50/50 — half to HECS via BPAY, half to your offset. Automate it if you can.

Frequently Asked Questions

What is the HECS repayment threshold for 2025-26?
The FY2025-26 compulsory HECS-HELP repayment threshold is $67,000. Below that repayment income, no compulsory repayment applies. Above it, you pay 15c for every $1 earned over $67,000 up to $125,000, then $8,700 plus 17c on each $1 over $125,000 up to $179,285, then 10% of total repayment income at $179,286 and above.
How much HECS will I pay on $80,000 in 2025-26?
On $80,000 repayment income in FY2025-26, your compulsory HECS repayment is $1,950 per year — calculated as 15c × ($80,000 − $67,000) = 15c × $13,000. That is approximately $162.50 per month, $75 per fortnight or $37.50 per week. This is roughly $1,250 less than the $3,200 you would have paid under the pre-July-2025 whole-of-income system.
Did the 20% HELP debt cut actually happen?
Yes. The Higher Education Legislation Amendment (20% Reduction of HELP Debts) Act 2025 passed the Senate on 31 July 2025. The ATO applied a 20% cut to all outstanding HELP-family balances (HECS-HELP, FEE-HELP, OS-HELP, SA-HELP, STARTUP-HELP) automatically, before 1 June 2025 indexation. Notifications were sent from late November 2025. Total relief was approximately A$16 billion across about 3 million borrowers.
Why is the ATO calculator still showing the old thresholds?
The ATO's online Study and training loan repayment calculator will not be updated to reflect the new marginal system and 20% cut until 1 July 2026. In the interim, the Department of Education's HELP debt reduction and repayment estimator at education.gov.au is the authoritative government tool. Commercial calculators (including this one) have been rebuilt for the new system already.
Is HECS calculated on gross or taxable income?
Neither — it is calculated on repayment income. Repayment income equals taxable income plus reportable super contributions, reportable fringe benefits, net investment losses and exempt foreign employment income. For most salaried workers with no investments or salary sacrifice, repayment income equals taxable income, which equals gross pay minus deductions.
Does my employer take HECS out of my pay?
Yes — once you tick the HELP box on your TFN declaration, your employer withholds an estimated HECS amount from each pay using the ATO's 2025-26 withholding tables. The amount is an estimate. At tax time the ATO reconciles against your actual repayment income and either applies any excess to your loan balance or issues a bill if withholding was insufficient.
Can I reduce HECS repayments with salary sacrifice?
Usually no. Salary sacrifice to super, novated leases and most packaged benefits create reportable super or reportable fringe benefits that are added back to your repayment income for HECS purposes. The net effect is that HECS is calculated roughly on your pre-sacrifice gross — salary sacrifice reduces your take-home pay without reducing your HECS repayment. Small exceptions exist for certain public benevolent institution packaging — see our salary packaging guide.
What if I have multiple jobs or variable income?
Each employer withholds as if their pay is your only income, so with multiple jobs you typically under-withhold and owe the difference at tax time. For variable income (commissions, bonuses, freelance), the ATO reconciles using your actual annual repayment income. Use our HECS multiple jobs calculator to combine incomes correctly before lodgement.
How long will it take to pay off my HECS debt?
Under the new marginal system plus the 20% cut, typical payoff times have shortened significantly. A $25,000 balance (post-cut) held by someone earning $90,000 clears in roughly 7-8 years of compulsory repayments alone, assuming indexation of 3%. Our indexation calculator runs the full projection with annual indexation baked in.
Do I still need to repay HECS if I move overseas?
Yes. Australian tax residents working overseas must report worldwide income to the ATO and make compulsory repayments on the same thresholds. Non-residents on a long-term basis still have reporting obligations. See our repaying HECS overseas guide.
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