Student Loan Repayments
Updated for 2026/27 IRD rates and thresholds
The 2026/27 settings
| Setting | Value |
|---|---|
| Annual repayment threshold | $24,128 |
| Repayment rate above the threshold | 12 cents per dollar (12%) |
| Weekly threshold (pro-rated) | $464.00 |
| Fortnightly threshold | $927.99 |
| Monthly threshold | $2,009.75 |
| Interest while living in New Zealand | Interest-free |
| Interest while overseas-based | Charged on the balance |
| Borrowing for living costs | Up to $333.48 a week (2026) |
Deductions are calculated each pay period, not annually. That means a high-earning fortnight can trigger a repayment even if your annual income ends up under the threshold — the over-deduction is refunded at year end, but the cash flow can be tight in the meantime.
What you repay at common salary levels
| Annual salary | Annual repayment | Per fortnight | As % of gross pay |
|---|---|---|---|
| $30,000 | $704.64 | $27.10 | 2.3% |
| $45,000 | $2,504.64 | $96.33 | 5.6% |
| $60,000 | $4,304.64 | $165.56 | 7.2% |
| $80,000 | $6,704.64 | $257.87 | 8.4% |
The repayment rate is flat above the threshold, so the burden grows faster than income in percentage terms up to the point where the loan is repaid. A borrower on $60,000 with a $40,000 balance clears it in roughly nine to ten years of continuous work, sooner with voluntary payments.
Living overseas: the balance-band obligation
If you spend 183 days or more overseas in a tax year you become an overseas-based borrower, and your obligation is set by your loan balance rather than your income:
| Loan balance | Due by 30 September | Total due by 31 March |
|---|---|---|
| Under $1,000 | Half the balance | The remaining half |
| $1,000 – $15,000 | $500 | $1,000 |
| $15,000 – $30,000 | $1,000 | $2,000 |
| $30,000 – $45,000 | $1,500 | $3,000 |
| $45,000 – $60,000 | $2,000 | $4,000 |
| Over $60,000 | $2,500 | $5,000 |
Two characteristics catch borrowers out. Minimum repayments never decrease as the balance falls — only increase when the balance moves into a higher band. And interest is charged while you are overseas: IRD notes that at the current interest rate a balance over $89,285 means the minimum repayments will not even cover the interest, so the debt grows while you pay it. If you are studying full-time overseas or volunteering for an approved charity, apply for a temporary repayment suspension to stay interest-free.
Self-employed and non-PAYE income
- Interim repayments are due by 15 January and count towards the year's obligation.
- End-of-year repayments are due by 8 February.
- Calculate on your IR3 income — 12% of the amount over $24,128, including rental, business and overseas income.
- Make voluntary payments through myIR at any time if your interim payments look short; interest applies to shortfalls.
Repaying faster: the arithmetic
Student loans are interest-free for NZ-based borrowers, which makes voluntary repayment a cash-flow decision rather than an investment one. Paying an extra $100 a fortnight on a $40,000 loan at a $60,000 salary clears roughly two and a half years earlier — but that same $100 a fortnight in KiwiSaver at 5% net would grow to about $8,000 over ten years. For most borrowers the sensible order is: keep the loan on schedule, take the employer KiwiSaver match and the full government contribution first, then consider extra loan payments.
Deep dive — 2026 update
Tax codes, deductions and the paperwork
| Situation | What applies |
|---|---|
| One job, salary over the threshold | M SL — tax plus 12% of pay over the pro-rated threshold |
| Second job | S SL, SH SL, ST SL or SA SL based on total income |
| Self-employed | No withholding — interim payments by 15 January, balance by 8 February |
| Working overseas for an overseas employer | Overseas-based obligation based on the loan balance |
| Receiving a main benefit | No deductions while on the benefit, but the loan continues to accrue obligations once you work |
The SL deduction appears separately on your payslip and does not reduce your taxable income — it is a repayment of a debt, not a tax. Keep payslips until the annual assessment confirms the total, because payroll errors on SL codes are common when someone changes jobs mid-year.
Check your balance and plan the payoff
- Log into myIR and open the student loan section — the balance, any interest, and the current repayment obligation are all there.
- Use IRD's student loan repayment calculator to compare the payoff date on minimum repayments versus an added amount per fortnight.
- Update your details if you change address, employer or country. Overseas-based borrowers who fail to notify IRD can fall into default without realising it.
- If you are struggling, contact IRD before you miss a payment — hardship arrangements exist, and penalties are easier to avoid than to reverse.
Interest-free status: when you lose it
- Still in New Zealand: interest-free, including if you return to study.
- Gone overseas: interest is charged from the day after you leave, unless a suspension applies.
- Full-time study overseas: apply for a temporary repayment suspension for the study period.
- Volunteering for an approved charity overseas: interest-free where the placement meets the Student Loan Scheme Act requirements — check the approved charities list before you go.
- Coming back to New Zealand: notify IRD so the interest-free status resumes; the date you return matters.
Interest-free status is the reason many borrowers prioritise other goals — KiwiSaver, a first home deposit, high-interest debt — over clearing the loan early. The exception is anyone planning to go overseas: on an interest-charging loan, extra repayments before you leave change the arithmetic completely.