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HECS Repayments

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Hi, so I have been working with my employee for a year or so but my employee have only just put down on my tax form that I have a HECS Debt. 

 

Will this stuff up my HECS repayments back at tax time? Ideally this is not my fault as I ticked the HECS box on my tax form when I started but they only just realised. Can I have any info on this? Im worried ill have to owe more at tax time.

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Most helpful response

Enthusiast Registered Tax Practitioner

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Hi CocoAsh

Your liability to repay part of your HECS debt will be determined when you lodge your tax return.  For instance, in the 2019/20 tax year you wouldn't have started to repay your HECS debt until you earned over $45,880.  The amount that you would pay back is based on your adjusted taxable income for the year (adjusted income = taxable income + net investment losses + reportable fringe benefits + exempt foreign employment income + reportable super contributions, as applicable) and is a percentage of your adjusted taxable income rather than a percentage of your debt.

Therefore, it depends upon how much you earn as to how much you will pay back.  If your employer hasn't been taking extra tax out of your wages to cover the repayment (which is what is supposed to happen when you tick the box that you have a HECS debt on your TFN Declaration Form), then you may end up with a tax bill at the end of the year.  It is impossible to say how much this would be though without looking at your income and expense details.

I suggest that you speak to an accountant or call the ATO directly with more information if you want to know how much you may have to pay.  You may find that you have paid enough tax to cover any repayment anyway....but it will really depend upon your circumstances.

1 REPLY 1

Most helpful response

Enthusiast Registered Tax Practitioner

Replies 0

Hi CocoAsh

Your liability to repay part of your HECS debt will be determined when you lodge your tax return.  For instance, in the 2019/20 tax year you wouldn't have started to repay your HECS debt until you earned over $45,880.  The amount that you would pay back is based on your adjusted taxable income for the year (adjusted income = taxable income + net investment losses + reportable fringe benefits + exempt foreign employment income + reportable super contributions, as applicable) and is a percentage of your adjusted taxable income rather than a percentage of your debt.

Therefore, it depends upon how much you earn as to how much you will pay back.  If your employer hasn't been taking extra tax out of your wages to cover the repayment (which is what is supposed to happen when you tick the box that you have a HECS debt on your TFN Declaration Form), then you may end up with a tax bill at the end of the year.  It is impossible to say how much this would be though without looking at your income and expense details.

I suggest that you speak to an accountant or call the ATO directly with more information if you want to know how much you may have to pay.  You may find that you have paid enough tax to cover any repayment anyway....but it will really depend upon your circumstances.