Ticking "yes" to the HECS-HELP debt question in myTax doesn't change your tax bracket — it triggers a separate compulsory repayment calculated on your income once you're above the threshold. For FY2025-26, that threshold is $67,000 of repayment income, and the repayment rate rises in bands from there, not as one flat percentage of everything you earn. AusTax AI's tax calculator applies these exact FY2025-26 bands automatically when you check your refund estimate.
What does ticking "yes" to the HECS-HELP question actually do?
Once you confirm you have a HECS-HELP (or other study/training support) debt, myTax calculates your compulsory repayment separately from your income tax, using your repayment income — broadly your taxable income plus a few add-backs like reportable fringe benefits and reportable super contributions, not just your salary. This repayment is added to what you owe; it isn't netted off against your refund, and it isn't optional once your income crosses the threshold, regardless of how much you still owe on the loan.
How is the FY2025-26 repayment actually calculated?
The current system is a marginal one — you only pay the higher rate on the income within each band, similar to how income tax brackets work, not a flat rate applied to your whole income once you cross the threshold.
| Repayment income | Repayment calculation |
|---|---|
| $0 – $67,000 | Nil |
| $67,001 – $125,000 | 15% of the amount over $67,000 |
| $125,001 – $179,285 | $8,700 plus 17% of the amount over $125,000 |
| $179,286 and above | 10% of total repayment income |
The key point: at the very top band, the calculation switches to a flat 10% of your entire repayment income rather than continuing the marginal approach — it's the one part of the scale that isn't banded.
Why did my employer already withhold extra tax for this?
If you told your employer about your HECS-HELP debt (usually via your TFN declaration), they withhold an additional amount from each pay to cover the expected annual repayment, on top of your regular PAYG withholding. At tax time, myTax reconciles what was actually withheld against what you owe under the bands above — if your employer withheld the right amount, the HECS question mostly confirms figures already accounted for. If you had multiple jobs and only one employer withheld for HECS, there's often a shortfall to catch up — this is exactly the kind of gap AusTax AI's income dashboard is built to catch, since it aggregates every employer's withholding in one place. Our guide on multiple jobs and income statements in myTax covers that specific situation.
Does paying HECS off faster reduce what myTax calculates?
No — the compulsory repayment for the year is based purely on your repayment income for that year, regardless of your remaining loan balance or any voluntary extra payments you've made directly to the ATO (ATO guidelines). Voluntary repayments reduce the balance itself but don't change the compulsory amount myTax works out from your income.
What if I finish paying off my HECS-HELP debt during the year?
If your final voluntary or compulsory payment clears the balance to zero partway through the financial year, you generally still don't need to do anything special in myTax — the ATO's own records confirm the debt is cleared, and no further compulsory repayment is calculated once the balance reaches zero. The "yes" answer to the HECS-HELP question simply reflects whether you had a debt at any point relevant to the year, and the reconciliation itself is handled from the ATO's side rather than something you need to manually adjust in the form.
Quick checklist
- Confirm the "yes" answer matches what's on your ATO account — you can check your HECS-HELP balance in myGov directly
- Remember this is calculated on repayment income, not take-home pay
- If you had two employers this year, check whether both withheld extra for HECS
- The repayment amount is separate from — and added to — your income tax and Medicare levy
For how this fits with the rest of your refund calculation, see our guide on why your myTax refund estimate differs from the final Notice of Assessment, and our tax refund calculator explainer for the full picture of how everything adds up.
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*Disclaimer: This is general information only and does not constitute personal tax advice. Consult a registered tax agent for advice tailored to your specific situation. Always verify against the latest ATO guidelines at ato.gov.au.*