Ibrahim Gardner
If you're wondering when to start paying off your student loan in New Zealand, you'll need to consider a few factors. Firstly, it's important to understand that your repayment obligations may differ depending on whether you're based in New Zealand or living overseas. The amount you pay also depends on your income level and the type of income you receive, such as salary, wages, or self-employment earnings. When you begin earning over a certain threshold, which is currently $24,128 annually before tax, you'll need to start making repayments. You can use a student loan repayment calculator to estimate how long it will take to pay off your loan and explore options for making extra payments to expedite the process. It's worth noting that student loans in New Zealand are interest-free if you remain in the country, but interest may apply if you go overseas for an extended period.
| Characteristics | Values |
|---|---|
| Loan repayment threshold | $24,128 per year ($464 per week) before tax |
| Repayment rate | 12% of every dollar earned over the threshold |
| Interest | Interest-free if based in New Zealand; interest charged if based overseas |
| Repayment suspension | Possible to apply for a temporary repayment suspension when based overseas |
| Additional payments | Possible to make additional payments to pay off the loan faster |
| Repayment calculation | Use the Student Loan repayment calculator on the Inland Revenue website |
| Repayment methods | Automatic deductions from salary or wages; manual payments |
| Repayment notification | Letter or text message |
| Tax code | 'SL' to be added to the tax code to indicate a student loan |
| Loan contract | Provided by StudyLink |
| Loan balance check | Check balance through Inland Revenue's online service, myIR |
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What You'll Learn
Repayments are 12% of income over the threshold
Repayments on your student loan in New Zealand depend on how much you earn and whether you’re based in New Zealand or living overseas. If you’re earning above a certain threshold, you’re required to pay back 12% of every dollar earned over that threshold. This threshold is adjusted annually. For the 2025 and 2026 tax years (1 April 2024 to 31 March 2026), the annual repayment threshold is $24,128.
If you are employed and earning a salary or wages, your employer will automatically deduct your student loan repayments from your pay if you have provided them with the correct tax code, which includes the “SL” (student loan) suffix. For example, if your tax code is “M” (for your main job), you should use “M SL” to indicate you have a student loan. If you get a payment from the Ministry of Social Development (MSD) and earn other income, you may want to apply for a student loan special deduction rate.
If you are self-employed, you’re responsible for calculating and making your own student loan repayments. You’ll need to file an income tax return at the end of the tax year. You can use a student loan repayment calculator to see how long it will take to pay off your loan. You can also make extra repayments at any time to pay off your loan faster.
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Interest-free if you stay in NZ
If you are a New Zealand-based customer, you are entitled to an interest-free student loan. The length of time you are out of New Zealand can affect how much interest is applied to your student loan and when repayments are due.
If you are overseas-based, you can apply to keep your student loan interest-free. Your application will be processed when you have provided all the required information and documents. You will generally be considered New Zealand-based and have an interest-free student loan if you live in Niue, Cook Islands, Tokelau, or Ross Dependency.
If you are overseas-based and do not have a temporary repayment suspension, interim student loan repayments are due. They count towards your end-of-year repayment obligation. Interest is added to overseas-based customers' student loans. Interest is calculated daily and added to the loan balance at the end of the tax year. The daily rate is 0.01342%, and the annual rate is 4.9%.
If you are in New Zealand and earning a salary or wage, you must add 'SL' to your tax code. This tells your employer that you have a student loan, and they need to deduct 12% of every dollar you earn over the repayment threshold from your pay to put towards your loan. For the 2026 tax year, the annual repayment threshold is $24,128. You can make extra repayments to your loan if you want to pay it off faster.
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Notify IR before leaving NZ
If you are leaving New Zealand, you must notify Inland Revenue (IR) of your plans. The length of time you are out of the country will affect how much interest is applied to your student loan and when your repayments are due. Before you leave New Zealand, check the IR website for information on minimum loan repayments for the country you are going to. You can also find out your options if you are having trouble repaying your student loan and what happens if you miss a payment.
If you are living overseas, you will need to pay an annual administration fee of $40, as well as any interest and penalties that are added to your loan. You will also receive an assessment notice each year that tells you the minimum payments you need to make. These payments are generally due by 30 September and 31 March. The amount you initially need to pay by each due date depends on your loan balance when you first become overseas-based, which is the day after you leave New Zealand. Your repayments are based on your total loan balance on 31 March each year you are overseas-based.
If you live in Australia, the United Kingdom, Europe, Canada, or the United States, you can set up direct debit payments in your myIR account. If you are transferring money from a New Zealand bank account, be aware that the bank may charge a fee for the transfer.
If you are returning to New Zealand after living overseas, your student loan payments may change.
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Repayment exemption for holiday jobs
Repayments on your student loan in New Zealand depend on how much you earn and whether you are based in the country or living overseas. The amount you have to pay each year is 12% of every dollar you earn over the repayment threshold. For example, in the 2026 tax year, if you earn $600 a week before tax, your repayment will be $16.32.
If you are working a holiday job, you may earn over the pay period repayment threshold but less than the annual repayment threshold. In this case, a student loan repayment deduction exemption may be the best option for you. You can apply for a repayment deduction exemption if you are a New Zealand-based customer and are studying full-time or about to start studying, and will reasonably expect to earn under the annual repayment threshold. The exemption runs from the day you apply until the end of the tax year (31 March).
You can apply for a repayment exemption or reduced deduction rate through Inland Revenue’s myIR online service. You may also be able to apply for a special deduction rate for your secondary job if you have more than one job.
It is important to use the right tax code when you are working. 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 need to deduct repayments from your pay to put towards your loan.
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Repayment calculator online
Repaying student loans in New Zealand depends on how much you earn and whether you're based in New Zealand or living overseas. The length of time you are out of New Zealand can also affect how much interest is applied to your student loan and when repayments are due.
If you're employed and earning a salary or wages, your employer will automatically deduct your student loan repayments from your pay if you've provided them with the correct tax code, which includes the "SL" (student loan) suffix. For example, if your tax code is "M" (for your main job), you should use "M SL" to indicate you have a student loan. 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.
If you're self-employed, you're responsible for calculating and making your own student loan repayments. You'll need to file an income tax return at the end of the tax year, and if your adjusted net income (income after expenses) is over the annual repayment threshold, you'll have a repayment to make. You can make extra repayments on your loan if you want to pay it off faster.
You can use the Inland Revenue student loan repayment calculator to see how long it will take to pay off your loan. You can include extra repayments in your calculation. This calculator estimates your loan repayment obligation, how long it will take, and how quickly you can pay it off with extra repayments. To use the calculator, you'll need your student loan balance.
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Frequently asked questions
You need to start making repayments once you earn over $24,128 a year before tax ($464 a week before tax).
The amount you have to pay towards your student loan each year is 12% of every dollar you earn over the repayment threshold.
Yes, you may need to keep making student loan repayments to Inland Revenue if you move overseas, unless you can get a temporary repayment suspension.
