Key Features of HELP/HECS Debt Repayments

Understanding how HELP/HECS debt repayments work can help you manage your finances effectively. Here are the key aspects:

Income Thresholds

• Repayments Begin: Repayments start when your taxable income exceeds $51,550 (for 2023–24).
• Repayment Rates: Rates begin at 1% of your income and increase progressively as your income rises.

How Repayments Are Made

• Automatic Deductions: Your employer deducts repayments from your salary if you’ve provided your Tax File Number (TFN).
• ATO Processing: These deductions are applied to your HELP/HECS debt balance by the ATO.

Impact on Your Tax Return

• Comprehensive Calculation: HELP/HECS repayments are based on your total taxable income, including salary, investments, and other earnings.

No Interest on HELP Debts

• Inflation Adjustment: Balances are indexed annually to reflect inflation, but no traditional interest is charged.

Planning ahead can help you manage your debt effectively while maximising your income. The Cado Tax app simplifies tracking and ensures compliance.

FAQs

Do I have to repay my HELP/HECS debt if my income is below the threshold?

No, repayments only begin when your taxable income exceeds the set threshold for the financial year.

Can I make voluntary repayments?

Yes, you can make voluntary repayments at any time to reduce your debt. This can be done directly through the ATO.