How it's calculated
If you have a student loan and earn salary or wages, you add SL to your tax code and your employer deducts repayments from each pay. For the 2026–27 tax year:Inland Revenue
- Main job (M SL or ME SL). 12% of every dollar you earn over the pay-period repayment threshold. The annual threshold is $24,128, which works out to:
| Pay period | Repayment threshold |
|---|---|
| Weekly | $464 |
| Fortnightly | $928 |
| Every 4 weeks | $1,856 |
| Monthly | $2,010.66 |
- Second jobs (secondary SL codes). 12% of all your pay from that job. The threshold has already been used by your main job.
- No interest while you live in New Zealand. Loans of New Zealand-based borrowers are interest-free, so every repayment comes off the balance.Inland Revenue
The formula
For each pay from your main job, following Inland Revenue's payroll specification:Inland Revenue
- Gross pay for the period, cut to whole dollars.
- If it is more than the pay-period threshold: repayment = 12% × (pay − threshold), cut to whole cents. Otherwise nothing.
Second job: repayment = 12% × pay (in whole dollars). For the year, the calculator multiplies by the number of pays and adds any extra repayments. Years to repay = balance ÷ yearly repayments.
Inland Revenue's own example: $600 a week less the $464 weekly threshold leaves $136, and 12% of that is $16.32.
Worked example
On a $60,000 salary paid fortnightly, you repay $165.48 a pay, or $4,302 a year. A $30,000 balance would take about 7 years to repay at that rate.
| 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 |
Adding $2,000 a year of extra repayments cuts the time to 4.8 years.
Assumptions and limitations
- Salary and wages only. If you are self-employed or have other income such as interest, rent or dividends, you may have an end-of-year repayment on that income as well. Inland Revenue works this out after the tax year.
- The same pay every period. If your pay goes above the threshold only in some periods, deductions can be more than your yearly obligation; you may then be due a refund, or you can apply for a repayment deduction exemption if you study full-time and expect to earn under the annual threshold.
- Second jobs: if your main job pays less than the threshold, you can apply for a special deduction rate so the unused threshold is used on your second job.
- Not included: the annual administration fee, compulsory extra deductions Inland Revenue may ask for, and interest for borrowers based overseas.
- Pay assumed constant. In practice pay rises speed up repayment.
To see the repayment alongside PAYE and KiwiSaver, use the PAYE calculator with the student loan switch on.