How student loan repayments work while you are in New Zealand

A threshold, a rate, and a tax code are the three things that decide what leaves your pay. Here is how they fit together.

Repayment rate

12% of income above the thresholdInland Revenue, IR335 student loan repayment deductions

Annual threshold

$24,128Inland Revenue, IR335 student loan repayment deductions

Weekly threshold

$464Inland Revenue, IR335 student loan repayment deductions

Fortnightly threshold

$928Inland Revenue, IR335 student loan repayment deductions

Main versus secondary job

Threshold applies to main job only

The repayment rate and threshold

For the 2027 tax year the annual repayment threshold is $24,128. Inland Revenue's September 2026 employer guide labels that threshold and the pay-period table as 2027. The standard repayment rate is 12% of main-job earnings above the applicable threshold. The threshold is not a deduction from gross pay; it is the point above which repayment deductions begin. Inland Revenue, IR335 student loan repayment deductions (opens in a new tab).

Worked example using the money.financial calculator. For the 2026-27 tax year, the calculator takes an assumed annual salary of $55,000 in main employment. It returns $30,872.00 above the threshold, an annual deduction of $3,704.64 and a monthly average of $308.72. This is an annual estimate, not an exact payroll deduction. It excludes irregular pay, special deduction rates, exemptions, extra deductions and the remaining loan balance or stop date. Money Financial, student loan repayment calculator (opens in a new tab).

The pay-period thresholds

The 2027 main-job repayment thresholds are $464 weekly, $928 fortnightly, $1,856 four-weekly and $2,010.66 monthly. The repayment is calculated by subtracting the relevant pay-period threshold from gross pay and multiplying the remaining amount by 12%. Inland Revenue, IR335 student loan repayment deductions (opens in a new tab).

Main job and secondary job are treated differently

For a main job, coded M SL or ME SL, the repayment is 12% of income above the threshold. For a secondary job, coded S SL, the repayment is 12% of the entire income, with no threshold applied. The reason is that the threshold has already been used in calculating the main job's repayment. Using it twice would under-collect. Inland Revenue, student loan repayments from salary or wages (opens in a new tab).

The practical consequence is that someone with two jobs, each paying below the annual threshold separately, can repay more than someone earning the same combined total from one job. The annual reconciliation at year end identifies this, but the mechanism that creates it is the separate threshold application to each source. Inland Revenue lets a borrower whose main job pays less than the pay-period threshold apply for a special deduction rate on a secondary job, which uses the unused threshold to reduce repayments.

What the repayment does not depend on

The repayment amount is independent of the outstanding balance and of how long the loan has been held. A borrower with $5,000 outstanding and one with $50,000 outstanding, both earning the same salary, repay the same amount. The balance affects how long it takes to clear; it does not affect the ongoing deduction rate. The loan also does not accrue interest while the borrower remains New Zealand-based. How quickly the balance falls depends on income and on any extra voluntary repayments.

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