How HECS / HELP repayments actually work
HELP is interest-free, but it's indexed each June to the lower of CPI or the Wage Price Index. Repayments are compulsory once your income crosses the first threshold — and they're a percentage of your whole income, not just the bit above the threshold.
The 2025-26 repayment scale
Repayments start at 1% of income from $67,000 and step up to 10% above $188,894. Critically, the rate applies to your entire repayment income — not just the portion above the threshold — so crossing a bracket can cost you more than the pay rise gives you, briefly.
Indexation, not interest
HELP debts are indexed on 1 June each year. Under 2024 reforms, indexation is the lower of CPI or WPI, applied retrospectively from 2023. In recent years that's been 3–4%. There's no compounding interest — the balance just keeps pace with inflation/wages.
Should you make voluntary repayments?
Generally no — there's no tax benefit, and money invested at a higher real return beats paying down an interest-free debt indexed at inflation. The exception: paying off the last $1,000–$2,000 before 1 June so it isn't indexed, or clearing the lot before a mortgage application (lenders treat HECS as ongoing income reduction).
Why your refund or bill might surprise you
Employers withhold HECS via PAYG based on regular pay only. Bonuses, commissions and second jobs often push your repayment income up a bracket the ATO sees only at tax time — leading to a surprise bill. Tick the HECS box on your TFN declaration with every employer to keep withholding close to assessed.