How HECS-HELP Works
How your student debt is indexed, when repayments kick in, current repayment thresholds, and whether paying it off early makes financial sense.
How indexation works
HECS-HELP debt is indexed to the Consumer Price Index (CPI) on 1 June each year. This means your debt grows with inflation — even if you're making repayments. In high-inflation years, this can be significant.
| Year | Indexation rate |
|---|---|
| 2021 | 0.6% |
| 2022 | 3.9% |
| 2023 | 7.1% |
| 2024 | 4.7% |
| 2025 | 2.4% (est.) |
The 7.1% indexation in 2023 added $7,100 to a $100,000 HECS debt — more than many people repaid that year.
2025–26 repayment thresholds
| Income | Rate | Annual repayment |
|---|---|---|
| Below $54,435 | 0% | Nil |
| $54,435 – $62,850 | 1% | $545–$629 |
| $62,851 – $66,620 | 2% | $1,257–$1,332 |
| $66,621 – $70,618 | 2.5% | $1,666–$1,765 |
| $70,619 – $74,855 | 3% | $2,119–$2,246 |
| $74,856 – $79,346 | 3.5% | $2,620–$2,777 |
| $79,347 – $84,107 | 4% | $3,174–$3,364 |
| $84,108 – $88,756 | 4.5% | $3,785–$3,994 |
| $88,757 – $93,969 | 5% | $4,438–$4,698 |
| Above $111,142 | 10% | $11,114+ |
Repayment is withheld by your employer through the tax system — you don't make payments yourself unless you have multiple jobs or other income.
Should you pay it off early?
Whether voluntary repayments make sense depends on the indexation rate versus your alternative investment return:
- Indexation (CPI) is higher than your investment return
- You want certainty and no lingering debt
- You're approaching a mortgage application
- You have cash savings earning little interest
- Indexation is low (below 3%) and you can earn more investing
- You have higher-interest debt (credit card, personal loan)
- Your income is near or below the repayment threshold
- Your super is a higher-priority top-up
Where HECS shows up in real life
HECS is easy to ignore when it is just an ATO balance, but it becomes very visible in two places: your payslip and your borrowing power. If you want to see how withholding changes your take-home pay, compare your result with the salary after tax calculator and then check the line items in our payslip guide.
If the bigger question is whether HECS is holding back your next step financially, the mortgage affordability calculator is usually the next place to test, because lenders treat HELP repayments as a real drag on serviceability.