Savanna Hoffman
If you've taken out a student loan in New Zealand, you'll need to start making repayments once you're earning over a certain amount. The amount you pay depends on your income, whether you're based in New Zealand or overseas, and whether you're earning a salary, wages, or are self-employed. Repayments are typically deducted automatically from your pay, but you can also make additional payments to pay off your loan faster. If you're having trouble making your repayments, you can apply for a special deduction rate or a temporary repayment suspension.
| Characteristics | Values |
|---|---|
| How much you pay | Depends on your income and whether you're based in New Zealand or living overseas |
| Repayment threshold | $24,128 annually ($464 weekly) |
| Repayment rate | 12% of every dollar you earn over the repayment threshold |
| Interest | Interest-free if you stay in New Zealand; charged if you go overseas, depending on how long you go for |
| Repayment arrangements | One-off payment or regular payments via internet or telephone banking; automatic payments at your bank |
| Loan contract | Must be returned with any requested documents; confirms enrolment details with the education provider |
| Establishment fee | One-off charge of $60 added to the loan balance as soon as any payments are made |
| Repayment calculator | Available on the Inland Revenue website to see how long it will take to pay off the loan |
| Tax code | 'SL' must be added to your tax code to indicate a student loan |
| Repayment exemption | Available if earning over the pay period repayment threshold but less than the annual repayment threshold |
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What You'll Learn
Repayment thresholds
The income threshold for the 2024 tax year was $22,828, meaning that borrowers must start repaying their loans once their income surpasses this amount. The repayment rate is 12% of every dollar over the income threshold, which is recalculated at the start of each tax year to account for changing living costs. For the 2026 tax year, the annual repayment threshold is $24,128.
The repayment threshold is broken down into pay period thresholds, which are used to calculate how much borrowers must repay based on their income over that period. For example, if a borrower's weekly income before tax is $600, their repayment for that week will be $16.32. This is calculated as follows:
- $600 (weekly pay before tax) − $464 (weekly repayment threshold) = $136
- $136 (income over the repayment threshold) × 12% (repayment rate) = $16.32
Borrowers with more than one job should note that the repayment threshold only applies to their main job. This means that they must repay 12% of every dollar earned from secondary jobs, and they may need to apply for a special deduction rate for these earnings.
It is important to add 'SL' to one's tax code when earning a salary or wage with a student loan. This indicates to employers that the employee has a student loan, and deductions need to be made from their pay.
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Repayment deductions
If you are self-employed or have other sources of income, you can check the IR website for information about deductions and tax codes. If you have multiple sources of income, you may be able to apply for a special deduction rate from Inland Revenue.
Benefits and payments from the Ministry of Social Development (MSD) are considered main sources of income, but they do not deduct student loan repayments. If you receive a payment from MSD and have other sources of income, you may want to apply for a student loan special deduction rate.
If you are overseas, the length of your stay can affect how much interest is applied to your student loan and when repayments are due. You may be able to get a temporary repayment suspension, but you must contact Inland Revenue before you leave New Zealand.
You can also make extra repayments to your loan if you want to pay it off faster. You can set up automatic payments at your bank or make a one-off payment using internet or telephone banking.
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Repaying from overseas
If you are living overseas, your student loan payments may change. The length of time you are out of New Zealand for can affect how much interest is applied to your loan and when repayments are due. Before moving overseas, check the IR website for information on minimum repayments for the country you are going to. You may need to keep making student loan repayments to Inland Revenue, unless you can get a temporary repayment suspension. You may also be charged interest, depending on how long you are away for.
If you are making repayments from overseas, you can make a one-off payment or set up regular payments using internet or telephone banking. You will need the account number: 03-0049-0006243-025. If your bank only needs a 2-digit suffix, use 25 instead of 025. Once you enter the account number, your bank may match it to the account name. If your bank doesn't match it, you can use the account name 'Work and Income Debt Management'. In the reference field, you need to put the letter 'D' followed by your 9-digit client number.
You can also set up automatic payments at your bank. You will need to download and print the 'Authority Form for Debt Repayments' form and take it to your bank. Your bank may charge you for this service.
You can make extra repayments to your loan if you want to pay it off faster. You can use the student loan repayment calculator to see how long it will take to pay off your loan, including any extra payments.
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Repaying with multiple incomes
If you have multiple incomes, your student loan repayment will depend on whether you earn a salary or wages, or you're self-employed or have other types of income.
Salary or Wages
When you get a salary or wage and have a student loan, you must add 'SL' to your tax code. This tells your employer that you have a student loan, and they will deduct 12% of your income over the repayment threshold towards your loan. The repayment threshold is $24,128 per year or $464 per week for the 2026 tax year.
For example, if you earn $600 a week before tax, your repayment will be $16.32. This is calculated as follows:
- $600 (weekly pay before tax) - $464 (weekly repayment threshold) = $136
- $136 (income over the repayment threshold) x 12% (repayment rate) = $16.32
If you have multiple jobs, the repayment threshold only applies to your main job. For any secondary jobs, you repay 12% of every dollar you earn. For example, if you earn $200 a week before tax in a secondary job, your repayment will be $24.
Self-Employed or Other Income
If you are self-employed or have other types of income, you should check the IR website for information on repayments, deduction rates, and tax codes. The IR website will also provide information on minimum repayments if you are living overseas.
Making Extra Repayments
You can make extra repayments to your loan if you want to pay it off faster. You can use the student loan repayment calculator to see how long it will take to pay off your loan, including any extra repayments.
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Repaying with a secondary job
Repaying your student loan with a secondary job in New Zealand involves a few key considerations. Firstly, understand that the repayment threshold does not apply to secondary jobs. This is because it has already been factored into your primary source of income. Consequently, you will need to 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 your secondary job, your repayment will be $24.
If you have multiple jobs and your main job pays less than the pay period repayment threshold, you can apply for a special deduction rate for your secondary job. This allows the unused amount of the pay period repayment threshold to be applied to your secondary income, reducing your overall repayments. To calculate your repayments, you can use the student loan repayment calculator, which can include extra repayments if you wish to pay off your loan faster.
It is important to note that your student loan repayments will be made to Inland Revenue. The amount you repay 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 is broken down into pay period thresholds. You can use a tax code with 'SL' to indicate that you have a student loan, and your employer will deduct 12% of your income over the pay period threshold.
If you are self-employed or your income is not solely from salaries or wages, your repayment amount will depend on your adjusted net income. This is calculated by taking your total income minus any expenses. The length of time you are out of New Zealand can also impact your repayment amount and the interest applied to your loan.
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Frequently asked questions
Any loan repayments will go to Inland Revenue. You can make a one-off payment or set up regular payments using internet or telephone banking. You can also set up automatic payments at your bank.
Repayments depend on how much you earn and whether you're based in New Zealand or living overseas. You must start making repayments once you earn over $24,128 a year before tax ($464 a week before tax). You will pay 12% of every dollar you earn over the repayment threshold.
If you're having trouble repaying your student loan, check the IR website for information on your options.
You can make extra repayments to your loan.
