Paying your Higher Education Loan Program (HELP) account

Clients with a Higher Education Loan Programme (HELP) account (preciously known as HECS debt) often ask why their employer has been withholding extra amounts of tax from my pay but their HELP account balance has not reduced reduced?

Your employer will withhold additional amounts from your pay throughout the year to cover your anticipated tax liability and compulsory HELP repayment.

These amounts withheld are not directly credited to your HELP account during the income year but will be included in the PAYG Withholding Credits label on your notice of assessment.

Your final tax liability and compulsory HELP repayment are calculated at the end of the income year after you submit your income tax return. At that time, any amount your employer has deducted from your pay will be used to offset the liability that has been calculated.

Any extra amounts that you may have overpaid will be refunded to you at that time. Similarly, if you have not paid enough tax through employer withholdings you may receive a bill. The compulsory repayment shown on your notice of assessment is credited to your HELP account on the date the notice of assessment is issued.

By David Maynard

Copyright 2014. My Tax Zone.