Ibrahim Gardner
Paying off a student loan in New Zealand can be a daunting task, but understanding the repayment process is the first step towards financial freedom. Repayments are typically made through deductions from your salary or wages, with an interest-free rate as long as you remain in the country. The amount deducted is calculated as a percentage of your income above a certain threshold, and you can also make extra repayments to speed up the process. However, failing to make timely payments or travelling overseas may result in interest charges and other consequences. With careful planning and management, you can take control of your student loan and work towards achieving your financial goals.
| Characteristics | Values |
|---|---|
| Interest | Interest-free if you stay in New Zealand. Interest may be charged if you go overseas, depending on how long you go for. |
| Repayment Rate | 12% of every dollar you earn over the repayment threshold. |
| Annual Repayment Threshold | $24,128 (2026 tax year) |
| Weekly Repayment Threshold | $464 a week before tax |
| Tax Code | 'SL' |
| Extra Repayments | Possible to make extra repayments to pay off the loan faster. |
| Repayment Calculator | Available on the Inland Revenue website to see how long it will take to pay off the loan. |
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What You'll Learn
Student loan repayment calculator
If you're looking to pay off your student loan in New Zealand, it's important to know that the loan is interest-free if you stay in the country. However, if you don't make your payments on time, you may be charged late payment interest. The same applies if you go overseas—you may be charged interest, depending on how long you stay abroad. Before leaving New Zealand, you must contact Inland Revenue to understand your repayment obligations. You may be able to get a temporary repayment suspension, but if not, you'll need to continue making payments.
To understand your repayment options and how long it will take to pay off your loan, you can use the Student Loan repayment calculator on the Inland Revenue website. This calculator takes into account your loan balance, income, and any extra repayments you plan to make. It estimates your loan repayment obligation, how long it will take to pay off the loan, and how quickly you can do so with additional repayments.
To use the calculator, you'll need to know your loan balance, which you can check on Inland Revenue's online service, myIR. The calculator allows you to compare the minimum repayment option with the option to make extra payments. If you have multiple sources of income, you may be able to apply for a special deduction rate from Inland Revenue to reduce your overall repayment amount.
It's important to use the right tax code when making repayments. If you earn a salary or wages, add an 'SL' to your tax code so your employer knows they need to deduct 12% of every dollar you earn over the repayment threshold from your pay. For the 2026 tax year, the annual repayment threshold is $24,128, which breaks down into specific pay period thresholds.
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Repaying when self-employed
If you're self-employed, you'll need to make voluntary payments to repay your student loan. Here's what you need to know:
Understanding the Loan Scheme
You'll be making payments under the voluntary repayment scheme. This scheme is for people who don't have compulsory deductions, like self-employed individuals or those with overseas-based income. You can make payments at any time, and there's
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Repaying when you have multiple jobs
If you have multiple jobs, you must ensure that you're using the right tax code so that repayments can be deducted automatically from your pay. You will need to use the 'SL' tax code, which tells your employer that you have a student loan and that they need to make deductions from your salary or wages.
The repayment threshold does not apply to secondary jobs because it has already been taken into account with your main job. This means that you repay 12% of every dollar you earn from your secondary job towards your student loan. For example, if you earn $200 a week before tax in a secondary job, your repayment will be $24.
If you have more than one job and you earn less than the pay period repayment threshold from your main job, you can apply for a special deduction rate for your secondary job. This lets the unused amount of the pay period repayment threshold be used with your secondary income, reducing your repayments. You can apply for a repayment exemption or reduced deduction rate through Inland Revenue's myIR online service.
You can make extra repayments to your loan if you want to pay it off faster.
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Repaying when you live overseas
If you're living overseas and have a New Zealand student loan, you're still required to make repayments. Here's what you need to know about repaying your New Zealand student loan while living abroad:
Understanding the repayment obligation:
You are required to repay your student loan even if you're living overseas. This applies if you have a student loan from the New Zealand government or a student loan administered by StudyLink. Repayments are based on your income and are You may want to see also If you want to pay off your student loan faster, you can make extra repayments. This can be done in a few different ways. Firstly, you can make a one-off payment. Secondly, you can ask your employer to make extra repayments on your behalf. This can be done even if you earn less than the student loan repayment threshold. If you have more than one job, you can apply for a special deduction rate for your secondary job. This lets you use the unused amount of the pay period repayment threshold with your secondary income, reducing your repayments. It's important to note that if you live in New Zealand, your student loan is interest-free. However, if you go overseas, you may be charged interest, depending on how long you stay abroad. Before you leave the country, you must contact Inland Revenue to understand your options. You may need to keep making repayments to Inland Revenue unless you can get a temporary repayment suspension. The amount you have to pay towards your student loan each year is 12% of every dollar you earn over the repayment threshold. For the 2026 tax year, the annual repayment threshold is $24,128. This threshold can be broken down into pay period thresholds. You repay 12% of every dollar you earn over the pay period repayment threshold when you use a tax code with 'SL' for your main job (M SL or ME SL). You can use the Student Loan repayment calculator on the Inland Revenue website to see how long it will take you to pay off your loan, including any extra repayments you plan to make. You may want to see also Repayments are automatically deducted from your salary or wages. You must add an 'SL' to your tax code to indicate that you have a student loan. You can also make extra repayments to pay it off faster. You pay 12% of every dollar you earn over the repayment threshold. For the 2026 tax year, the annual repayment threshold is $24,128. Yes, you still need to make repayments. How you make repayments depends on the kind of income you get. If you have more than one source of income, you may be able to apply for a special deduction rate. You may need to keep making student loan repayments to Inland Revenue, unless you can get a temporary repayment suspension. The length of time you are out of NZ for can affect how much interest is applied to your loan. You can check your loan balance in Inland Revenue's online service, myIR. You can also use the Student Loan repayment calculator on the Inland Revenue website to see how long it will take you to pay off your loan.Occupational Therapy Student Loans: Strategies for Repayment
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Frequently asked questions
