If you have a New Zealand student loan and earn salary or wages, your repayments come straight out of your pay. You don’t arrange anything except your tax code: add “SL” to it, and your employer deducts a set share of every pay above a threshold and sends it to Inland Revenue.
This guide covers how much is deducted in the 2026–27 tax year (1 April 2026 to 31 March 2027), what happens with second jobs and holiday work, and how extra repayments shorten the time to pay off your loan. The NZ student loan calculator works out the figures for your own pay.
How repayments are worked out
You repay 12% of every dollar you earn over the repayment threshold. The annual threshold is $24,128, unchanged for 2026–27.Inland Revenue
Your employer doesn’t wait until the end of the year. The threshold is split into a threshold for each pay period, and the deduction is worked out on each pay on its own:
| You’re paid | Threshold for each pay |
|---|---|
| Weekly | $464 |
| Fortnightly | $928 |
| Every four weeks | $1,856 |
| Monthly | $2,010.66 |
Inland Revenue’s own example: if you earn $600 a week before tax, the first $464 is under the threshold, and you repay 12% of the rest. That is $16.32 a week.Inland Revenue
Because each pay is treated separately, a pay with overtime or a bonus has a bigger deduction, and a short pay below the threshold has none. Over a year of steady pay, the total comes to about 12% of your salary above $24,128.
Repayments at common salaries
For a main job on an SL tax code in 2026–27:
| Salary | A week | A fortnight | A year (paid fortnightly) |
|---|---|---|---|
| $25,000 | $1.92 | $3.96 | $103 |
| $35,000 | $25.08 | $50.16 | $1,304 |
| $45,000 | $48.12 | $96.24 | $2,502 |
| $55,000 | $71.16 | $142.44 | $3,703 |
| $65,000 | $94.32 | $188.64 | $4,905 |
| $80,000 | $128.88 | $257.76 | $6,702 |
| $100,000 | $175.08 | $350.16 | $9,104 |
Just above the threshold the deduction is small, and it grows by the same share of every extra dollar after that. Your employer drops the cents from each pay before working out the deduction, and cuts the result to whole cents, so the figures can differ by a few cents from a simple percentage. Here is how it works for a $60,000 salary paid fortnightly:
| Line | Per pay | Per year |
|---|---|---|
| Main job pay (fortnight) | $2,307.69 | $59,999.94 |
| Repayment threshold | $928.00 | $24,128.00 |
| Main job repayment (12% over threshold) | $165.48 | $4,302.48 |
| Total repaid | $165.48 | $4,302.48 |
What it does to your take-home pay
Student loan repayments come on top of PAYE, the ACC earners’ levy and KiwiSaver. They don’t change your tax. On $60,000 paid fortnightly with 3.5% KiwiSaver, take-home pay is $1,627.99 a fortnight on M SL, against $1,793.47 without a loan.
That is a noticeable difference, but loans are interest-free while you’re based in New Zealand, so the whole deduction comes off your balance. Take-home pay at common salaries has a table with and without a student loan.
Getting your tax code right
You add SL to whatever code you’d otherwise use: M SL or ME SL for your main job, and SB SL, S SL, SH SL, ST SL or SA SL for a second job. You give the code to your employer on an IR330 tax code declaration. Using the right code matters because your employer can only deduct what the code tells them to; if it’s wrong, Inland Revenue may ask your employer to change it.Inland Revenue
Once your loan is paid off, give your employer a new IR330 without SL, for example moving from M SL to M. Monthly pay works the same way as the table above: on $60,000 paid monthly, the deduction is $358.72 a month, using the monthly threshold of $2,010.66.
Second jobs
The threshold is only used once, in your main job. In a second job on a secondary SL code (such as S SL or SH SL), you repay 12% of every dollar, with no threshold. If your main job pays $50,000 and a weekend job pays $10,000, the main job repays $3,104 a year and the weekend job $1,198, a total of $4,302.
This can be unfair if your main job pays less than the threshold. With a main job paying $20,000 and a second job paying $10,000, the main job repays $0, but the second job still repays $1,198. In that case, if your second job uses SB SL or S SL, you can apply in myIR for a special deduction rate, which lets the unused part of the threshold count against your second job. When you apply, you give an estimate of your total earnings from all your jobs and how often each one pays you. The rate is set for one quarter at a time, so you need to reapply each quarter, ideally before the next quarter starts.Inland Revenue
Students and holiday jobs
If you work over the summer break, your weekly pay can easily go over the weekly threshold even though you’ll earn less than $24,128 over the whole year. Normally you’d still have deductions in each of those weeks: a student earning $700 a week over summer would repay $28.32 a week, even if they earn nothing for the rest of the year.
A repayment deduction exemption stops this. You can apply in myIR if you’re based in New Zealand, are studying full-time or about to start, and reasonably expect to earn under the annual threshold. It lasts from the day you apply until 31 March, including breaks between semesters, and you can apply again for the next tax year.Inland Revenue
Paying your loan off faster
You can make extra repayments whenever you like, either as one-off payments to Inland Revenue or by asking your employer to deduct an extra amount from each pay on top of the compulsory deduction. You don’t need a new IR330 for this, and you can make extra repayments even when you earn less than the threshold.Inland Revenue
Because there’s no interest while you live in New Zealand, every extra dollar shortens the loan directly. With a balance of $30,000 and a salary of $60,000, compulsory repayments alone clear the loan in about 7 years. Adding $2,000 a year of extra repayments brings that down to about 4.8 years. These estimates assume your pay stays the same; if your pay rises, your compulsory repayments rise with it and the loan clears sooner. Extra repayments are worth weighing against other uses for the money, such as paying off debt that does charge interest.
The calculator leaves out the small administration fee Inland Revenue charges each year your balance is above a minimum.Inland Revenue
Other income and end-of-year repayments
Deductions from salary and wages cover most borrowers. But if you also have other income, such as self-employment, contracting, rent, interest or dividends, Inland Revenue adds that “adjusted net income” to your salary or wages after the end of the year. If the total is over the annual threshold, you may have an end-of-year repayment to make, and you may also need to make interim repayments during the following year.Inland Revenue
Deductions from pay are treated more strictly. If your employer deducts the right amount for your tax code, it is a full and final deduction, even if your income for the whole year turns out to be under the threshold. That is why the repayment deduction exemption matters for holiday jobs. Only significant over-deductions, such as an employer’s mistake, can be refunded, and not if you used the wrong tax code.Inland Revenue
If you move overseas
The interest-free rule applies only while you’re based in New Zealand. If you leave for more than a few months, your loan may stop being interest-free: interest is then worked out each day on your balance and added after 31 March, and overseas-based borrowers have their own repayment rules. Tell Inland Revenue before you go, and check whether one of the exceptions applies to you. If you come back, your loan can become interest-free again.Inland Revenue
Work out your repayments
Enter your main salary, pay frequency, any second-job pay, your balance and any extra repayments.
$165.48
- Main job repayments per year
- $4,302
- Second job repayments per year
- $0
- Total repaid per year
- $4,302
- Years to repay
- 7
- Pay-period threshold
- $928.00
- Your employer deducts 12% of each pay over $928.00 a fortnight (the $24,128 annual threshold divided by pay periods) when you use an SL tax code.
- Your loan is interest-free while you are based in New Zealand, so every dollar repaid reduces the balance. The time to repay assumes your pay stays the same and leaves out the annual administration fee.
Student loan repayment: $165.48 a fortnight (2026–27)
Show the breakdown
| Line | Per pay | Per year |
|---|---|---|
| Main job pay (fortnight) | $2,307.69 | $59,999.94 |
| Repayment threshold | $928.00 | $24,128.00 |
| Main job repayment (12% over threshold) | $165.48 | $4,302.48 |
| Total repaid | $165.48 | $4,302.48 |
To see student loan repayments alongside PAYE and KiwiSaver in each pay, use the PAYE calculator. For how tax codes and every other deduction work, read the New Zealand take-home pay guide.
