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HECS with Multiple Jobs — Why You'll Owe at Tax Time

By , Melbourne Read: 2 min Checked against: ATO, Study Assist

Two jobs means two employers withholding HECS — and both assume theirs is your only income. The under-withholding often adds up to a four-figure tax bill in July.

Why two employers under-withhold

Each employer applies the HECS threshold to your pay as if it's your only income. Under the FY2025-26 marginal system, if Job A pays $40,000 and Job B pays $40,000, each employer sees you below the $67,000 threshold and withholds zero HECS. Your combined repayment income is $80,000 — so you actually owe 15c × ($80,000 − $67,000) = $1,950 for the year. At tax time the ATO reconciles and bills you the shortfall.

What to do

  1. Claim the tax-free threshold only at your main job. On the secondary job's TFN declaration, mark "No" to the tax-free threshold. This causes higher PAYG withholding from the secondary job, which partially absorbs the future HECS shortfall.
  2. Ask your main employer to withhold extra. You can request voluntary additional withholding as a fixed dollar amount per pay. Size it to cover the expected HECS shortfall.
  3. Set aside the shortfall yourself. Calculate your combined income, work out your HECS under the marginal formula, and transfer that amount from secondary-job pay to a savings account. Pay the ATO bill when it arrives.
  4. Lodge a PAYG instalment variation. If you want formal structure, you can request the ATO put you on a quarterly PAYG instalment system that accounts for the combined income.

Worked example — $55,000 + $45,000 = $100,000 combined

Job A ($55,000): both jobs are below $67,000 individually, so withholding is $0. Job B ($45,000): same — $0.

Actual HECS due on $100,000 under the FY2025-26 marginal system: 15c × ($100,000 − $67,000) = $4,950. Tax-time bill: $4,950.

To avoid: ask Job A to withhold an additional $412 per month (or $190 per fortnight), or set that aside manually.

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

Does HECS come out of my second job?
Your second employer withholds HECS only if their pay alone exceeds the $67,000 threshold (FY2025-26). If each job pays less than $67,000 individually but combined they exceed it, neither employer withholds — and you'll owe at tax time. To avoid the shortfall, tick "No tax-free threshold" at the second job, ask one employer to withhold extra, or save the expected shortfall manually.
Why did I owe HECS at tax time?
Almost certainly because you have multiple income sources (multiple jobs, investment income, business income) and each employer withholds as if their pay is your only income. Combined, your repayment income crossed the $67,000 marginal threshold — but the withholding didn't reflect it. The ATO reconciles at year-end and bills you the difference.
How do I stop owing HECS each year?
Request your main employer withhold an additional fixed amount per pay cycle equal to 15c per dollar of your secondary income (assuming combined income stays below $125,000). Or ask the ATO to put you on a quarterly PAYG instalment schedule based on combined income. Both approaches smooth the liability across the year instead of hitting you with a lump sum in July.
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