HECS-HELP (student loan)
A government study loan you repay through the tax system.
HECS-HELP is the Australian government loan that covers your university tuition. It’s interest-free but indexed to inflation each year. You start repaying once your income passes a set threshold, at a percentage that rises with income — collected automatically through the tax system, a bit like extra tax.
Repayments are worked out on repayment income, which is broader than taxable income: it adds back reportable super contributions, reportable fringe benefits, net investment losses and exempt foreign income. Since 2025-26 the calculation is marginal — the rate applies only to the income above the threshold, rather than to every dollar you earn.
Worked example
On $80,000 of repayment income in 2026-27, with the minimum threshold at $69,528, you repay about $1,571 for the year — roughly 2% of your income, because only the amount above the threshold is counted.
Common mistake
Assuming the rate applies to your whole income. Under the older system, crossing a threshold by a dollar could cost hundreds; the marginal calculation means a small pay rise now only ever increases the repayment by a fraction of that rise.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Marginal tax rate
The tax rate on your next dollar of income.
PAYG (Pay As You Go)
Paying tax through the year rather than in one lump.
Superannuation guarantee (SG)
The compulsory super employers pay on top of wages.
Salary sacrifice
Redirecting pre-tax salary into super or a benefit.
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