HECS-HELP Calculator Australia 2026: Repayment Rates, Thresholds and Tips
Updated April 2026 · 10 min read
HECS-HELP: Australia Cheapest Debt
HECS-HELP is indexed to CPI, not charged interest. This makes it fundamentally different from student loans in other countries. Your debt grows with inflation but does not compound. The average graduate with AUD 46,000 in HECS sees their debt grow by approximately AUD 1,500 to 2,500 per year through indexation — far less than the 5 to 8 percent interest charged on student loans in the US or UK. Use our salary calculator to see how HECS repayments affect your take-home pay.
Why Voluntary Repayment Is Almost Always Wrong
Since HECS costs only CPI (roughly 3 to 4 percent), any money used for voluntary repayment could earn significantly more invested elsewhere. Super contributions earn 8 to 10 percent historically. Index fund investing earns 7 to 10 percent. Even a mortgage at 6 percent costs more than HECS. Pay minimum HECS through the tax system and direct extra money to higher-returning investments.
The one exception: if you are about to earn just above a repayment threshold, consider salary sacrificing into super to bring your repayment income below the threshold. This avoids a repayment tier while building your super. Use our budget planner and loan calculator to plan your finances around HECS repayments.
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Frequently Asked Questions
When do I start repaying HECS-HELP?
When your repayment income exceeds approximately AUD 54,950 for 2025-26. Below this threshold, you pay nothing. Above it, repayment starts at 1 percent and increases progressively to 10 percent for incomes above AUD 151,201.
Is HECS-HELP debt indexed to inflation?
Yes. HECS-HELP debt is indexed annually to CPI (capped at the lower of CPI or the Wage Price Index since 2023 reforms). This means your debt grows with inflation but does not compound like a real loan — there is no interest in the traditional sense.
Should I voluntarily repay my HECS faster?
Generally no. HECS is the cheapest debt you will ever have (indexed to CPI only, no real interest). Any money used for voluntary repayment would almost certainly earn more invested in super or an index fund. Only consider voluntary repayment if you are about to go overseas long-term.
Does HECS affect my borrowing capacity?
Yes. Lenders factor HECS repayments into their serviceability calculations. An AUD 50,000 HECS debt reduces borrowing capacity by approximately AUD 30,000 to 50,000. However, HECS is not on your credit report and does not affect your credit score.
What happens to HECS if I go overseas?
You are still required to repay if your worldwide income exceeds the threshold. Report income annually to the ATO. Non-lodgement can result in penalties. The debt is not written off and does not expire.