hecs loan how does it affect my tax return

Have you studied at university and applied for a HECS-HELP loan to help pay for your tuition fees?

How will your HECS-Help loan affect your tax return and how do you make repayments? There have been changes over the last few years and here are 5 things you need to know:

1.  What are they?

The Australian Government’s Higher Education Loan Programme (HELP) supports eligible students with their tuition fees at tertiary institutions and other approved education providers.

2.  How do you obtain your loan balance?

The ATO provides online services to allow individuals to access and view their loan account records. The myGov website allows you to set up an account and link it with the ATO and other government agencies. Alternatively, contact your accountant to find out your outstanding amount.

3.  How do you make repayments?

It is compulsory that HELP debt repayments are made through your income tax return once your repayment income is above the minimum threshold of $53,345 for the 2015 financial year. Your repayment income is based on the following:

taxable income + net investment losses + reportable fringe benefits + reportable superannuation contributions + any exempt foreign employment income

Voluntary payments can also be made to reduce your HELP loan balance. Currently, there is a 5% discount available to people who make voluntary repayments above $500 and this discount will show as a credit against the outstanding balance. Subject to legislation, the Australian Government proposes to remove this discount from 1 January 2016.

The 2014 -2015 repayment rates are as follows:

Repayment Income Repayment Rate
Below $53,345 0%
$53,345 – $59,421 4%
$59,422 – $65,497 4.5%
$65,498 – $68,939 5%
$68,940 – $74,105 5.5%
$74,106 – $80,257 6%
$80,258 – $84,481 6.5%
$84,482 – $92,970 7%
$92,971 – $99,069 7.5%
$99,070 and above 8%

4.  What happens if you exclude your HELP amount from your tax return?

If you don’t report your HELP debt on your tax return, the ATO will routinely update your tax return and send you an amended Notice of Assessment.

5.  How do you inform your employer?

If you have a HELP loan you need to advise your employer. Your employer will withhold an additional amount from your wage to cover your compulsory repayments. You can inform your employer by completing a tax file number declaration which can be ordered from the ATO. The correct box must be selected for the employer to withhold the right amount. If you have a HELP loan, tick ‘yes’ at Question 11.

If you are not sure of your HELP debt balance and how it will affect your tax return, make an appointment with an accountant at Optima Partners today.


Andrea Allen – Accountant



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