UNDERSTANDING YOUR HECS/HELP DEBT
What is a HECS/HELP Debt?
HECS-HELP is a loan scheme for eligible students enrolled in Commonwealth supported places to pay their student course fees directly to your education institution.
The loan will be required to be paid once your taxable income reaches the repayment threshold.
When do I have to start repaying HECS/HELP Loan?
Once your income reaches a certain threshold (currently $51,957 for the 2018-2019 financial year), loan repayments are then made through the tax system.
As your income increases, the higher the repayment.
Click the link to see the repayment thresholds.
What is the HECS/Help repayment threshold?
Your HECS-HELP repayment income (HRI) differs from your taxable income. Calculate it like this:
- Your taxable income for an income year, plus
- Your total net investment losses, plus
- Any total reportable fringe benefit amounts shown on your PAYG payment summary; plus
- Reportable super contributions; and
- Any exempt foreign employment income from the current income year.
Can i make voluntary repayments through my tax return?
No. Your repayment is based on your HECS-HELP repayment income (see above for explanation)
If you wanted to pay off your debt faster, you can make voluntary repayments, regardless of how much you earn through avenues such as your Mygov account.
Note: voluntary repayments are not taken into account when completing your tax return and will not reduce your compulsory repayments (unless you paid it in full!).
Do i need to tell my employer?
Yes. Each time you change employment you are required to notify your employer.
To notify your employer tick the box on your Tax File Number Declaration form which you’ll need to fill out before you get to work.
Your employer will set aside additional tax from each pay to cover your estimated HECS-HELP debt based on your annual HRI.
Note, your employer will withhold the additional tax based on the income they pay to you. They won’t factor in other income sources, previous jobs or investments. So, if you’ve got any of these sources of income, you’ll have to make a top-up payment once you lodge your tax return.
My payslip shows HEC'S tax has been taken out, why is my debt not reducing?
Your repayment is based on your HECS repayment income (see above for explanation).
Your repayment amount is not determined until all your income and expenses are calculated when completing your tax return not during the year with your employer.