Student Loan Repayments in NZ: What Comes Out of Your Pay

If you’ve got a student loan and you’re working in New Zealand, a slice of every pay goes towards it. It’s taken automatically, and it’s a flat percentage, so it’s easy to work out once you know the one number that matters: your repayment threshold.

You repay 12 cents of every dollar you earn above the repayment threshold. IRD’s annual threshold is $24,128, which works out to $464 a week. Your employer takes it out of your pay if your tax code ends in SL. While you live in New Zealand, the loan is interest-free.

(Your pay − threshold) × 12% = your repayment
Your pay Threshold Repayment

Your threshold, by pay period

IRD breaks the yearly figure down for each way of being paid. Find yours:

Weekly$464
Fortnightly$928
Every 4 weeks$1,856
Monthly$2,010.66
Yearly$24,128

You repay on the part of each pay that is above the number for how often you are paid.

On a main job, you only repay on the part of each pay that’s above these numbers. Earn less than the threshold in a pay, and nothing is taken for the loan in that pay.

A quick example

Say you’re paid $1,000 a week. Take off the $464 threshold and you’re left with $536. Twelve percent of $536 is $64.32, so that’s your repayment for the week.
IRD’s own example is smaller: $600 a week gives $136 above the threshold, and a repayment of $16.32.

What you’d repay at different salaries?

These use the $24,128 yearly threshold.

Yearly pay

Pay above threshold

Repayment a year

Repayment a week

$40,000

$15,872

$75,872

$36.63

$60,000

$35,872

$4,304.64

$82.78

$80,000

$55,872

$6,704.64

$128.94

$100,000

$75,872

$9,104.64

$175.09

Your payslip, with and without a loan

Same $60,000 salary on tax code M, with 3.5% KiwiSaver. The only difference is the loan.

Without a student loan
Income tax$10,220.50
ACC levy (1.75%)$1,050.00
KiwiSaver (3.5%)$2,100.00
Student loan$0.00
Take-home pay a year $46,629.50 about $896.72 a week
With a student loan
Income tax$10,220.50
ACC levy (1.75%)$1,050.00
KiwiSaver (3.5%)$2,100.00
Student loan$4,304.64
Take-home pay a year $42,324.86 about $813.94 a week

On a $60,000 salary, the loan takes about $82.78 a week out of your pay.

The loan costs about $82.78 a week here. You can check your own numbers in our [Salary Calculator] by ticking the student loan box.

Which situation are you in?

Main job Use a tax code ending in SL, like M SL or ME SL. You repay 12% of everything above the threshold. Do this: tell your employer you have a loan when you fill in your tax code form.
Second job The threshold is already used on your main job, so you repay 12% of every dollar from the second one. Do this: use a secondary code with SL, like SH SL.
Benefit and work MSD doesn't take repayments from a benefit, so you use code M. If you also earn other income, you may want a special deduction rate. Do this: check the special deduction rate page on IRD's website.
A short holiday job If you earn more than the pay period threshold but less than the yearly one, a deduction exemption may suit you better. Do this: ask IRD before the job starts.
Living overseas Repayments depend on your loan balance rather than your income, and interest can apply. Do this: tell IRD, and check its overseas borrower pages.
How long until you're debt-free? Example: a $30,000 loan, with pay staying the same.
$60,000 salary about 7 years
Repaying $4,304.64 a year
$70,000 salary about 5.5 years
Repaying $5,504.64 a year

This is only an example. Your real timeline depends on your balance and how your pay changes. IRD has a repayment calculator that can include extra repayments.

A pay rise speeds things up, because 12% applies to every extra dollar above the threshold. Real timelines depened on your balance and how your income changes. IRD has a repayment calculator that can include extra rpayments.

Paying it off faster

If you’d like to clear the loan sooner, you can make extra repayments at any time, and they come straight off your balance. Because the loan is interest-free while you’re in New Zealand, extra payments don’t save you interest, so whether to pay extra is a personal call. You can check your balance and repayment history in myIR.

Dates worth knowing

15 January Interim repayments are due. They count towards your end-of-year amount.
8 February End-of-year repayments are due. If you have an amount to pay, IRD sends a letter or text message.
31 March Overseas repayments are due, unless you have a temporary suspension.

Frequently asked questions

12% of every dollar you earn over the repayment threshold. IRD’s annual figure is $24,128.

Yes, while you live in New Zealand. Interest can apply if you live overseas.

It tells your employer to take student loan repayments out of your pay. You need it on your main and any second job.

Not from your main job in that pay. On a second job you repay 12% of every dollar, because the threshold is used up on the first.

No repayments are taken, and you may have to catch up later. Give your employer the SL code as soon as you can.

IRD has separate pages for overpayments and underpayments, and it will tell you what to do.

Yes. You can make extra repayments any time.

Related calculators and guides

Sources

Inland Revenue: KiwiSaver changes (ird.govt.nz). Retirement Commission (retirement.govt.nz). Last checked: 20/10/2026.

Disclaimer

This page is general information, not financial or tax advice. KiwiSaver rules can change. Check ird.govt.nz and your KiwiSaver provider before you make a decision.