How Do I Make HECS/HELP repayments as a Sole Trader?

Disclaimer: This blog provides general information and opinion only and is not personal legal advice. Clinicians should seek independent professional or legal advice for their specific personal circumstances.

If you're an allied health practitioner or other professional running your own business as a sole trader in Australia, you may be wondering how HECS or HELP debt repayments work when you're not on a traditional payroll. Unlike employees who have repayments automatically withheld from their wages through PAYG withholding, sole traders are responsible for managing these repayments themselves through the Australian Taxation Office (ATO).

How HECS/HELP Debt Works for Sole Traders

HECS (Higher Education Contribution Scheme) and HELP (Higher Education Loan Program) debts are linked to your taxable income. As a sole trader, this includes profits from your business (business income minus allowable expenses) and any other personal income, such as investment income. Repayment thresholds are based on your total taxable income, not just business earnings. For the 2025–26 financial year, repayments start once your income exceeds $67,000, with repayment rates dependant on your income level.

Making Repayments

As a sole trader, HECS/HELP repayments are not automatically deducted, so you need to account for them when lodging your annual tax return. The ATO calculates your repayment based on your taxable income reported in your return, and you can pay the amount owed in a few ways:

1. Lodging your tax return: Your repayment is calculated when you submit your return.
2. PAYG instalments: If you're earning a significant income as a sole trader, the ATO may require you to make Pay As You Go (PAYG) instalments, which can include estimated HECS/HELP repayments. This spreads your payments across the year rather than a lump sum at tax time.
3. Direct payment: You can pay any outstanding HECS/HELP debt via myGov, online banking, or the ATO app once your assessment is issued.

Tips for Managing HECS/HELP as a Sole Trader

• Track your income carefully: Because HECS/HELP repayments are based on your taxable income, accurate bookkeeping and keeping business and personal finances separate is essential.
• Estimate your repayments: Use the ATO's Simple Tax Calculator to estimate how much you may owe in HECS/HELP repayments.
• Plan for cashflow: Set aside money throughout the year so you're not caught off guard with a large repayment at tax time.
• Stay up to date with thresholds: Repayment thresholds and rates can change annually, so check the ATO website each year.

Being a sole trader means you're in control of your business and finances, but it also means you're responsible for managing tax obligations like HECS/HELP repayments. By keeping careful records, estimating repayments, and planning ahead, you can ensure that your HECS/HELP obligations are met efficiently while avoiding any surprises at tax time.

Disclaimer: This blog provides general information and opinion only and is not personal legal advice.