HECS / HELP for Junior Doctors: Repayment Thresholds & Rates 2026–27

HECS repayment for doctors sits somewhere between tax and debt: it comes out of your pay like tax, it indexes like a loan, and it only settles at tax time.

This guide explains:

• what HECS / HELP actually is
• how HECS repayment Australia rules work
• why your debt can grow
• what salary packaging changes
• how HECS affects take-home pay, tax returns, and borrowing

What's New for 2026–27?

• For 2026–27, compulsory repayments start once HELP repayment income exceeds $69,528 — up from $67,000 in 2025–26, because the thresholds are indexed each year in line with average weekly earnings.
• Compulsory HELP repayments use a marginal system (introduced 1 July 2025). Repayments apply only to income above the threshold.
• The Australian Government also applied a one-off 20% reduction to HELP debts before indexation on 1 June 2025.

What is HECS?

Most people still say HECS, even when they mean HELP. If you studied medicine in a Commonwealth supported place, your loan is usually HECS-HELP.

Think of it like this:

• the government pays your university fees now
• you repay the government later
• you do not usually get a normal monthly loan bill
• once your income is high enough, repayment happens through the tax system
• the balance is indexed each year, so it can grow over time

In one sentence: The government pays your university fees now, and you repay it slowly through the tax system once your income passes a certain level.

How HECS Repayments Actually Work

The key point: HECS repayments are income-based. They are not like a car loan or credit card where you choose a monthly amount.

Here is the simple version:

1. You finish uni with a HELP debt.
2. Once your income passes the repayment threshold, a compulsory repayment applies.
3. If your employer knows you have a HELP debt, payroll may withhold extra during the year.
4. The ATO works out the real amount when you lodge your tax return.

Important:

• your employer does not decide the final amount
• the amount withheld on your payslip is only an estimate
• the final repayment is based on your annual HELP repayment income
• repayment rates are progressive, based on income bands

Repayment structure (2026–27):

• Below $69,528: Nil
• $69,528–$129,717: 15 cents for every $1 above $69,528
• $129,718–$186,050: $9,028 + 17 cents for every $1 above $129,717
• $186,051+: 10% of total repayment income

From the 2025–26 income year the repayment system changed to a marginal structure. Repayments are calculated only on the portion of income above the threshold ($69,528 for 2026–27) rather than the entire income. Work out your exact figure with the HECS repayment calculator.

Simple doctor example

• Doctor income: $80,000
• Repayment threshold: $69,528 repayment income (2026–27 financial year)
• Income above threshold: 80,000 − 69,528 = 10,472
• Repayment: 10,472 × 0.15 ≈ $1,571 per year
• Estimated fortnightly impact: ≈ $60

Plain English: If your income is above the threshold, the government applies the repayment rate for your income band. That amount is then collected through the tax system.

How Much HECS Do Doctors Usually Owe?

Starting HELP balances vary a lot by training pathway and any previous university study. The number that matters is your own balance in your ATO account, because compulsory repayments are calculated from your repayment income each year.

HECS Indexation Explained (Why Your Debt Can Grow)

Your HELP debt is indexed once per year. That means the balance can go up even if you are already working and making compulsory repayments.

Important points:

• this is not traditional bank interest
• but it still increases the balance
• it usually happens once per year
• indexation is applied on 1 June each year

Current indexation rule: HELP debts are indexed on 1 June each year using whichever is lower: CPI or WPI. Indexation applies only to debt that is at least 11 months old.

How Much HECS Will a Junior Doctor Actually Repay?

Here is what the repayment looks like at three typical junior-doctor incomes. They are illustrative only. Actual compulsory repayment depends on your annual HELP repayment income, not just base salary.

Useful reminder:

• overtime
• penalties
• locum income
• second jobs
• salary packaging
• reportable amounts under ATO rules can all change the final number.

See how HECS changes take-home pay in our NSW doctor pay guide. You can also compare after-tax income across states in our Junior Doctor Pay Series.

Estimate your HECS repayment

To estimate what HECS may cost you at your current salary, start with your annual income, add any overtime or extra income, then add any reportable amounts included under ATO rules. That total is your likely HELP repayment income — the figure your repayment rate is applied to.

HELP repayment income includes:

• taxable income
• total net investment losses
• reportable fringe benefits amount (RFBA)
• reportable super contributions
• exempt foreign employment income

This means salary packaging or fringe benefits may increase HELP repayment income even if they are not taxable income. Overtime, locum work, and second jobs can also change the final result.

Repayment rates depend on income thresholds set by the Australian government. For the 2026–27 financial year, compulsory HELP repayments start once repayment income exceeds $69,528.

Treat any estimate as a guide only. Final compulsory repayment is worked out by the ATO based on your annual HELP repayment income.

Do You Have to Pay HECS Off Quickly?

Usually, no. HECS behaves differently from normal debt.

Key points:

• repayments are automatic once your income is high enough
• there is no standard monthly loan bill like a personal loan
• if your income drops, compulsory repayments may drop or stop
• voluntary repayments are optional

That is why there is usually no rush to clear HECS early.

Should Doctors Pay Off HECS Early?

There is no one right answer. For some doctors, paying early may make sense. For others, it may not.

Pros of paying it off early

• you reduce the balance before future indexation
• your finances may feel simpler
• you may like the idea of being debt-free
• your cash flow may improve once the debt is gone

Cons of paying it off early

• the money may be more useful in an emergency fund
• the money may be better used on high-interest debt first
• exam costs, moving costs, and training years can make cash buffers more important
• compulsory repayments already adjust if your income falls
• HELP debt is softer than normal commercial debt
• remaining HELP debt is generally cancelled on death rather than passed to family members

Simple decision guide

Paying early may make more sense if:

• you already have an emergency fund
• you do not have higher-interest debt
• your income is stable
• you want to reduce future indexation risk

Paying slowly may make more sense if:

• cash flow is tight
• you are saving for exams, moving, leave, or a house deposit
• your income may vary
• you value flexibility more than clearing HELP fast

Can Doctors Reduce Their HECS Debt?

There are specific HELP debt reduction arrangements for eligible rural and remote doctors and nurse practitioners. Eligibility is strict and based on location and service criteria.

Check StudyAssist first, then confirm any related workforce program details with Department of Health and Aged Care guidance before relying on it for financial planning.

Does Salary Packaging Affect HECS Repayments?

Yes, it can. This is one of the biggest salary packaging and HECS traps for junior doctors.

The key point: Compulsory HECS / HELP repayments are based on HELP repayment income, not just taxable income.

That means salary packaging does not automatically reduce your HELP bill. Reportable fringe benefits always count: the ATO adds your full grossed-up RFBA back to repayment income, regardless of your employer's FBT-exempt status — so standard hospital packaging increases your compulsory repayment.

So a doctor may:

• pay less ordinary income tax through salary packaging
• but still have a higher-than-expected HELP repayment outcome at tax time

HELP repayment income includes taxable income, total net investment losses, reportable fringe benefits amount (RFBA), reportable super contributions, and exempt foreign employment income.

Reportable fringe benefits (such as some salary packaging arrangements) can increase your HELP repayment income even though they are not taxable income.

Put your own numbers in the HECS repayment calculator to see the packaging effect in dollars. For more detail, read Salary Packaging for Junior Doctors.

Does HECS Affect Getting a Mortgage?

Usually yes, but not in the same way as a credit card or personal loan. For most HELP debt mortgage doctors questions, the main issue is cash flow.

Banks often care less about the total HELP balance and more about the fact that HECS reduces usable income.

In plain English:

• HECS can reduce your take-home pay
• lower take-home pay can reduce borrowing capacity
• that may slightly reduce how much you can borrow

Simple example

• Doctor A and Doctor B earn similar salaries.
• Doctor B has compulsory HELP repayments.
• A lender may treat Doctor B as having less usable income each month.
• Result: Doctor B may borrow a bit less.

Why lender treatment varies

Lender policy is not identical. Some lenders may:

• assess HELP repayments as an ongoing expense
• use a serviceability method that effectively builds the HELP repayment into the calculation in a different way
• be more or less generous depending on income and living-expense assumptions

That is why borrowing capacity can differ between lenders. A broker can help compare lender policy if HECS is materially affecting serviceability.

HECS and Tax Returns

This is the main HECS tax return doctors trap.

What happens during the year

• your employer withholds PAYG tax
• if payroll knows you have a HELP debt, they may withhold extra for HELP as well

What happens at tax time

The ATO then calculates your actual compulsory repayment using your annual HELP repayment income. That means the number on your payslip is only a guide.

Why junior doctors often owe extra tax at EOFY

Common reasons include:

• multiple hospital jobs
• locum or agency work
• lots of overtime or penalties
• changing employers during the year
• salary packaging and reportable amounts
• not telling payroll about your HELP debt
• payroll withholding not matching your final annual income

One high-yield point: HECS withholding on your payslip is not the final answer. Your tax return is.

See also our NSW doctor pay guide and Junior Doctor Pay Series for take-home pay context.

Common HECS Questions (FAQ)

Sources

StudyAssist — HECS-HELP · StudyAssist — Repaying your HELP loan · StudyAssist — Reducing HELP debt for rural and remote doctors and nurse practitioners · StudyAssist — Indexing your HELP debt · ATO — Study and training support loans · ATO — Repayment thresholds and rates · ATO — Overseas obligations · ATO — Tax file number declaration · Department of Education — What’s new for HELP from 1 July 2025 · Federal Register of Legislation

Disclaimer: General information only. Not financial, tax, legal, credit, or personal advice.