How HECS-HELP repayments work
In Australia, Higher Education Loan Program (HELP) debts are not repaid like regular bank loans. There is no commercial interest rate; instead, the balance is indexed annually to inflation (CPI) on 1 June.
Repayments are compulsory once your taxable repayment income exceeds the minimum statutory threshold ($54,435 for 2024–25). Your employer withholds repayments through the PAYG system based on statutory repayment rates ranging from 1% up to 10% of total income.
Worked example
Suppose you have an accumulated HECS-HELP debt of $35,000 and earn $75,000 in taxable repayment income.
At $75,000, your compulsory repayment rate is 4.0%, which equals $3,000 per year ($250 per month deducted from your pay).
If your income remains steady, the debt is cleared in approximately 11 to 12 years, adjusting for annual inflation indexation.
Voluntary repayments vs indexation
You can make voluntary repayments at any time via myGov/ATO. However, because HECS-HELP does not carry commercial interest and has no fixed monthly penalty, many graduates prioritise higher-interest debts (such as credit cards or car loans) before making voluntary HELP contributions.
Inputs for the HELP loan calculator
Outstanding HELP debt
Your current total loan balance recorded with the Australian Taxation Office (ATO).
Annual repayment income
Your taxable income plus reportable fringe benefits, net investment loss, and reportable super contributions.
Expected indexation rate
The annual inflation adjustment rate applied to the loan balance on 1 June.
CALCULATOR QUESTIONS
HELP loan calculator questions
What is the minimum income to start repaying HELP?
For the 2024–25 tax year, compulsory repayments begin when your repayment income reaches $54,435.
Is interest charged on HELP debt?
No commercial interest is charged. The balance is indexed to the lower of CPI or the Wage Price Index once per year on 1 June.
Can I pay off my HELP loan early?
Yes, you can make voluntary payments through ATO online services, though there is no early repayment discount.