HECS-HELP repayments when you are self-employed: how business income is counted
If you earn a wage, your employer takes your HELP repayment out of each pay without you thinking about it. When you are a sole trader, no one does. The first sign of the debt is usually the notice of assessment, when the line for HELP is added to your tax bill. This guide explains how the repayment is calculated for the self-employed, how deductions affect it, and how to avoid a shock. We use no specific thresholds here because they are updated annually; check the ATO for the current year’s rates.
Updated 5 October 2026. General information only, not tax advice.
How the repayment is worked out
Your HELP debt includes any HECS-HELP, FEE-HELP and similar loans. Once your repayment income passes the compulsory repayment threshold for the year, a repayment is added to your tax assessment. The ATO publishes the thresholds and rates for each income year, and the system has been changing, so use the current table rather than an older figure from an article or a friend.
The repayment is part of the same assessment as your income tax and Medicare levy. It is not a separate bill and not a separate lodgment.
What counts as repayment income
Repayment income is not just your business profit. Broadly it is made up of:
- your taxable income, which is your business income minus allowable deductions plus other income such as interest or a wage
- reportable fringe benefits
- net investment losses, such as a negative gearing loss
- reportable super contributions, such as salary sacrifice or personal contributions you claim as a deduction
- some exempt foreign employment income
Because it begins with taxable income, a legitimate business deduction lowers the repayment as well as the tax. A claimed personal super contribution does not help in the same way, because it comes back in as a reportable contribution.
Why PAYG instalments matter here
The ATO can include a HELP component in your PAYG instalments if it expects you to owe a repayment. Instalments are reported on your activity statement, so you may see the amount on your BAS. If you are on instalments, you are already paying the debt in bits through the year. If you are not, nothing is being collected until the return is assessed, and the HELP repayment arrives on top of the income tax bill. See PAYG instalments explained.
Setting aside enough
The simplest approach is to include the HELP debt in your tax set-aside. If you would normally set aside a percentage of each invoice for tax, add a few more percent once your income is near or above the threshold, then true it up after a rough calculation at the end of each quarter. The ATO’s online calculators will estimate the repayment for any income, and your myGov HELP balance shows how much you owe. See setting aside money for tax.
Low income years and lumpy income
The repayment depends on the year’s repayment income. If a bad year pushes you below the threshold, you make no compulsory repayment that year, and that is a legitimate result of the system, not a loophole. Remember that a good year after a bad one is when the repayment comes back in full. Freelancers with irregular income should plan for the good years rather than relying on the bad ones.
Voluntary repayments
You can pay extra to the ATO at any time. The debt is indexed each year on 1 June, and the indexation rate has varied, so whether to repay early depends on the rate that applies, your other debts and your cash flow. A HELP debt does not charge an interest rate in the usual sense. Check the current indexation figure before deciding, and ask your accountant if the sums matter. Never pay voluntarily from money you have set aside for GST or PAYG.
How FlowFi helps
FlowFi tracks your income and deductions across the year from the bank statement and shows a running estimate of your tax set-aside. It cannot see your HELP balance, so add that from myGov to your plan. Your repayment is set at assessment, so treat FlowFi’s figures as an estimate, and check with the ATO or your tax agent for the exact amount.
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Frequently asked questions
Does my ABN mean the ATO will not collect my HELP debt?
No. Having an ABN changes how you report income, not whether the debt exists. The repayment is added when your return is assessed, whether you are an employee, a sole trader or both.
Do business deductions reduce my HELP repayment?
Yes, ordinary deductions reduce taxable income, which is the starting point for repayment income. Contributions to super that you claim as a deduction are added back as a reportable amount.
Should I tell my accountant about my HELP debt?
Yes. They can see it from the ATO, but telling them helps with planning, especially in years when your income moves a lot or you expect to be near the threshold.
General information only, not tax advice. Check your own situation with a registered tax agent or the ATO.
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