HECS / HELP Repayment Calculator
2025-26 ATO marginal repayment system
Find out your annual repayment, how many years until your debt is cleared, and the total cost of indexation over the life of your loan — with and without voluntary repayments.
How much your income grows each year
2024-25: 4.7% (ATO published). Adjust to model different scenarios.
Indexation Impact (June 2025)
On 1 June each year the ATO adds CPI indexation to your outstanding balance. Here's what that means for your debt right now.
Current debt
$26,500
Added in June at 4.70%
+$1,246
Balance after indexation
$27,745
That's $1,246 added to your debt on a single day in June — without you spending a cent. If your compulsory repayment ($2,700/yr) is less than this indexation amount, your balance is actually growing despite making repayments.
Voluntary Repayment Analysis
Enter an annual voluntary repayment to see exactly how much time and indexation you'd save.
Note: voluntary repayments are not refundable. No bonus applies (the 10% bonus was abolished in 2022). The saving is purely from reducing the balance before indexation is applied each June.
HECS vs. Investing — What's Mathematically Better?
Should you make voluntary repayments, or invest that money instead? It depends on indexation vs. expected market returns.
HECS indexation rate
4.7%
Your 'interest rate'
Sharemarket returns
7–9%
Historical avg (ASX/global)
Verdict
Investing wins
At current rates
Mathematically, investing comes out ahead. With your current indexation rate of 4.7% and expected market returns of 7–9%, you'd likely earn more by investing spare cash than by voluntarily repaying HECS. The difference is roughly 2.3–4.3% per year in your favour.
Important caveats: HECS repayments are not refundable, market returns fluctuate (2022 saw ASX200 drop ~5%), and high indexation years (like 2023 at 7.1%) can flip the equation quickly. In a high-CPI environment, paying down HECS is one of the safest 'investments' available.
The 'right' answer also depends on your tax rate, risk tolerance, and investment timeframe. This comparison is mathematical only — speak to a financial adviser for personal advice.
Debt balance over time
Assuming 3% annual income growth and 4.7% indexation
2025-26 Repayment Brackets
| Repayment income | Rate |
|---|---|
| Below $67,000 | Nil |
| ▶$67,001 – $125,000 | 15c per $1 over $67k |
| $125,001 – $179,285 | 17c per $1 over $125k |
| $179,286+ | 10% of total income |
Your income of $85,000 falls in the bracket highlighted above.
Years to clear debt
9yrs
Based on 3.00% income growth and 4.70% indexation per year
Annual compulsory repayment
$2,700
3.18% effective rate on your income
Monthly equivalent
$225
Withheld via payroll (employer deducts)
Total indexation over loan life
$6,764
At 4.70% per year — the real cost of waiting
See HECS impact on your take-home pay
Our pay calculator shows exactly how HECS reduces your net pay each period, alongside tax, Medicare, and super.
Open Pay CalculatorHow HECS-HELP repayment works
HECS-HELP repayments are compulsory once your repayment income exceeds $67,000 (2025-26). Unlike a regular loan, repayments are calculated as a marginal amount on income above the threshold — not on your total balance. Your employer withholds the repayment via payroll throughout the year, and the ATO reconciles it in your tax return.
HECS indexation explained
Your HECS debt is indexed to CPI on 1 June each year. This means the balance grows even if you're making repayments. In 2023, indexation hit 7.1% — the highest in 30 years — adding thousands to many balances overnight. In 2024-25 it was 4.7%. Voluntary repayments reduce the balance before indexation is applied, saving you money over the long term.