Annual deductions for someone paid on code ME SL. Numbers below include income tax, ACC earner's levy, and student loan (where applicable). KiwiSaver is not included — add your chosen rate on top.
Annual gross
Income tax (PAYE)
ACC levy
Student loan
Take-home
Effective rate
$30,000
$3,638
$525
$705
$25,132
16.2%
$48,000
$6,788
$840
$2,865
$37,507
21.9%
$60,000
$9,701
$1,050
$4,305
$44,945
25.1%
$70,000
$13,221
$1,225
$5,505
$50,050
28.5%
Source: IRD published 2026-27 tax brackets, ACC earner's levy 1.75%, student-loan rate 12% over $24,128. See full PAYE calculator for any income and pay period.
Who should use ME SL?
Use ME SL when this is your main job, your annual income is between $24,000 and $70,000, you have an NZ student loan, and you are NOT on a main benefit / NZ Super / a Veteran's Pension / WfF. Combines progressive income tax, the $520 IETC credit, and 12% SL deduction above the weekly / fortnightly threshold.
When to switch from ME SL
M SLIncome rises above $70,000 or you become ineligible for IETC.
MEYou finish paying the student loan.
Common mistakes with ME SL
⚠Two thresholds matter: IETC abates from $66,001 and disappears at $70,001; SL starts deducting above $24,128. Between $66k and $70k, every extra dollar of pay reduces your IETC by 13 cents AND adds 12 cents of SL on top of your marginal tax — effectively a 55c-in-the-dollar block at the 30% rate.
⚠If you stop using ME SL mid-year (e.g. you start receiving a benefit), you may receive a year-end over- or under-payment. Use the IR3 wash-up tool after 31 March.
What's the effective marginal rate on ME SL between $66k and $70k?
At the 30% income-tax bracket: 30% tax + 13% IETC abatement + 12% student loan ≈ 55% on each extra dollar in the abatement window. This is the highest compound marginal rate in the NZ PAYE system.
Does IETC apply to the student-loan portion?
No. IETC is a direct credit against income tax only. It does not reduce your 12% SL deduction.
