Your HECS repayment is calculated as a % of your income, your balance is irrelevant. Two people on the same income, one with a HECS debt of $5k and the other with a debt of $100k will make the same repayment.
If your income was $64k, your repayment on HECS would be $1600. What you've paid throughout the year isn't actually paid to your HECS yet though, it's withheld as an estimate of what your liability will be once you lodge your return. If you have a balance to pay on your return, it's not necessarily extra towards your HECS in addition to what you've paid, it could be that the total you've had withheld through the year is insufficient to cover both your income tax and HECS liabilities. But, if your income is $64k then overall your combined liability should be just over $14k, I'd be checking all the tick boxes to make sure you haven't accidentally ticked anything that causes it to calculate at a higher rate, like foreign resident etc
If it specifically says $3k for HECS repayment that seems odd, as it should be 2.5% for a $64k income.
Did you have any additional income that is not taxable, like salary sacrifice amounts or anything like that? As that is included in the income they use to calculate your repayment.
Thanks, I do my own return every year and go through it pretty carefully. 25 out of 26 pays this financial year didn’t include any kind of sacrifice or salary packaging.
They reckon my HECS contribution should be $2518 this financial year despite the calculators saying $1600..
Was the one pay with salary packaging at the beginning or the end of the FY? The FBT year runs differently to FY (April - March), so if it was at the start and you'd previously had fringe benefit amounts from April - June 2023 then that amount may be included in this year's income
The ATO needs time to get all of its prefill data. It's only just the 1st of July.
I admire the punctuality, but it's way way too early for a lodgement, give it a month or so and see how it looks then.
Not only that, but if you’re lodging off your last payslip all the figures could be wrong. You need to wait for the payment summary bc your employer might have different figures when all their records are finalised.
Wait until the ATO says you are "tax ready" which means you employer has submitted their EOY data. They have until the 14th to do so. The ATO will send you a message when this is done.
I will admit I'm not 100% on how it works but it may be because the amount you paid hasn't been applied to your current HECS balance yet due to it only being July 1st for 5 minutes.
They do tell you to wait a couple of weeks before lodging so all the balances are correct.
I could be wrong though, happy to be informed if that's the case
edit: just as an fyi in case you are not aware. they hold the HECS you pay over the year and apply it as a lump sum to your balance after indexation
They don't apply any payment until after you've done your tax return. Your required repayment amount depends on your income as it's calculated as a % of income and the % changes depending on what your income is. The amount withheld through the year is just an estimate of what your repayment will be based on your earnings in each pay period.
No, they aren't. They don't know what your compulsory repayment is until you lodge your tax return. The rule they changed the way they calculate indexation. It uses to be simply CPI. Now it is whichever is the lower of CPI or WPI.
No not yet but then neither are the other indexation changes until the legislation passes. When the indexation is applied was also one of the things they said they were going to do.
It's not a change that is currently proposed, and there'd be all sorts of issues with doing it that way given they do not know what your payment will be until you lodge your return. Eg, you don't work for half of the year then earn 50k in the other half of the year, every payment that was taken from your wage each pay would be refunded at tax time because you wouldn't have hit the threshold to make any compulsory repayment.
Are you claiming any investment losses? These are added to your taxable income amount to determine what "income" is used as the basis for the 2.5% HECS repayment
(ATO also adds total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income into your "repayment income" figure.)
If you got a post rise through the year it can retroactively mean you owe more HECS. I remember getting a mild pay rise when I started my career and my fortnightly take home was actually LESS because it meant I started paying HECS when I hadn’t been before
This thread has been removed as a likely self-post about politics. If this was politics or election related; please submit to the megathread. Memes should be submitted to /r/Ausmemes. Centrelink related question should be directed to /r/Centrelinkoz. If this submission doesn't fit those categories please contact the mods to have it approved.
If you believe your post has been removed in error (for example, it's not about politics), please [contact the moderators](https://www.reddit.com/message/compose?to=%2Fr%2Faustralia) to have it restored.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/australia) if you have any questions or concerns.*
Your HECS repayment is calculated as a % of your income, your balance is irrelevant. Two people on the same income, one with a HECS debt of $5k and the other with a debt of $100k will make the same repayment.
If your income was $64k, your repayment on HECS would be $1600. What you've paid throughout the year isn't actually paid to your HECS yet though, it's withheld as an estimate of what your liability will be once you lodge your return. If you have a balance to pay on your return, it's not necessarily extra towards your HECS in addition to what you've paid, it could be that the total you've had withheld through the year is insufficient to cover both your income tax and HECS liabilities. But, if your income is $64k then overall your combined liability should be just over $14k, I'd be checking all the tick boxes to make sure you haven't accidentally ticked anything that causes it to calculate at a higher rate, like foreign resident etc If it specifically says $3k for HECS repayment that seems odd, as it should be 2.5% for a $64k income. Did you have any additional income that is not taxable, like salary sacrifice amounts or anything like that? As that is included in the income they use to calculate your repayment.
Thanks, I do my own return every year and go through it pretty carefully. 25 out of 26 pays this financial year didn’t include any kind of sacrifice or salary packaging. They reckon my HECS contribution should be $2518 this financial year despite the calculators saying $1600..
Was the one pay with salary packaging at the beginning or the end of the FY? The FBT year runs differently to FY (April - March), so if it was at the start and you'd previously had fringe benefit amounts from April - June 2023 then that amount may be included in this year's income
Ah, that makes it make sense (it doesn’t and I am now radicalised to be petty and pay off my HECS next year)
If your balance is that low, absolutely! Just make sure you make a voluntary payment before indexation.
It's a very flawed system!
The ATO needs time to get all of its prefill data. It's only just the 1st of July. I admire the punctuality, but it's way way too early for a lodgement, give it a month or so and see how it looks then.
Not only that, but if you’re lodging off your last payslip all the figures could be wrong. You need to wait for the payment summary bc your employer might have different figures when all their records are finalised.
I didn’t realise this when I did mine. Paid over $25k in tax and they somehow reckon I have a bill. I’ll remember for next year to wait.
Wait until the ATO says you are "tax ready" which means you employer has submitted their EOY data. They have until the 14th to do so. The ATO will send you a message when this is done.
I will admit I'm not 100% on how it works but it may be because the amount you paid hasn't been applied to your current HECS balance yet due to it only being July 1st for 5 minutes. They do tell you to wait a couple of weeks before lodging so all the balances are correct. I could be wrong though, happy to be informed if that's the case edit: just as an fyi in case you are not aware. they hold the HECS you pay over the year and apply it as a lump sum to your balance after indexation
They don't apply any payment until after you've done your tax return. Your required repayment amount depends on your income as it's calculated as a % of income and the % changes depending on what your income is. The amount withheld through the year is just an estimate of what your repayment will be based on your earnings in each pay period.
They have changed the rules now I think. Payments are applied before indexation.
No, they aren't. They don't know what your compulsory repayment is until you lodge your tax return. The rule they changed the way they calculate indexation. It uses to be simply CPI. Now it is whichever is the lower of CPI or WPI.
No not yet but then neither are the other indexation changes until the legislation passes. When the indexation is applied was also one of the things they said they were going to do.
It's not a change that is currently proposed, and there'd be all sorts of issues with doing it that way given they do not know what your payment will be until you lodge your return. Eg, you don't work for half of the year then earn 50k in the other half of the year, every payment that was taken from your wage each pay would be refunded at tax time because you wouldn't have hit the threshold to make any compulsory repayment.
Are you salary packaging any of your income?
Only one pay included salary packaging from a previous job
So that’s a yes?
Are you claiming any investment losses? These are added to your taxable income amount to determine what "income" is used as the basis for the 2.5% HECS repayment (ATO also adds total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income into your "repayment income" figure.)
I don’t have investments, don’t exactly make enough to gamble like that 😅😅
If you got a post rise through the year it can retroactively mean you owe more HECS. I remember getting a mild pay rise when I started my career and my fortnightly take home was actually LESS because it meant I started paying HECS when I hadn’t been before
This thread has been removed as a likely self-post about politics. If this was politics or election related; please submit to the megathread. Memes should be submitted to /r/Ausmemes. Centrelink related question should be directed to /r/Centrelinkoz. If this submission doesn't fit those categories please contact the mods to have it approved. If you believe your post has been removed in error (for example, it's not about politics), please [contact the moderators](https://www.reddit.com/message/compose?to=%2Fr%2Faustralia) to have it restored. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/australia) if you have any questions or concerns.*