Student Loan Repayment Calculator

New Zealand student loan repayments are income-based. If you earn above the repayment threshold, your employer automatically deducts repayments through the PAYE system using a tax code that ends in SL (for example, M SL or ME SL).

The repayment rate is 12% on every dollar you earn above $24,128 a year. The threshold has been frozen at $24,128 across 2024-25, 2025-26 and 2026-27 — there is no annual CPI indexation, so as wages rise more of your income falls above the line.

The threshold is applied per pay period, not once at year end. That works out to about $464 a week or $928 a fortnight. So if you earn $600 in a week, your deduction is ($600 − $464) × 12% = $16.32 that week.

There is no interest on student loans for NZ-based borrowers. Interest only applies once you are overseas-based.

Because the threshold is split across each pay period, two people with the same annual income can have different deductions if their pay is uneven. Overtime, bonuses, and irregular hours push a single pay period above the weekly threshold and trigger a 12% deduction on that excess — even if your yearly total is modest.

If you have a second job, the SL code on that job generally deducts 12% from the first dollar, because the threshold is assumed to be used up by your main job. If that over-deducts, you can apply to IRD for a repayment deduction exemption or a special deduction rate so you are not over-paying through the year.

Salary and wage earners are "pay-period" borrowers: as long as deductions are made correctly each payday, you have no end-of-year square-up on your salary income.

If you earn self-employed income, rental income, or other income that is not taxed through PAYE, you are not a pure pay-period borrower. IRD works out an end-of-year repayment obligation of 12% on your adjusted net income above the $24,128 annual threshold, and you may need to pay in instalments during the year.

Combine this with the income tax calculator and ACC levy calculator to see your full obligation on self-employed income.

Once you are overseas-based — broadly, away from New Zealand for 184 or more consecutive days — your loan is no longer interest-free and your repayments switch from income-based deductions to fixed annual obligations set by the size of your loan balance, not your income. These are paid in two instalments. Keeping up with them avoids default interest and late-payment penalties that can grow the balance quickly.

There is a short interest-free grace window if you are overseas only briefly and return, and a separate rule set for new graduates working abroad — check your myIR account for your exact status before you travel.