Key facts at a glance
2026 repayment threshold
NZ$24,128
About NZ$464/week
Repayment rate
12%
Flat, no brackets
Interest while NZ-based
0%
Interest-free for NZ residents
Here's the number before the mechanics: on a NZ$65,000 salary, IRD deducts NZ$4,905 a year in compulsory student loan repayments, on top of everything else already coming out of your pay. That's 12% of the NZ$40,872 you earn above the NZ$24,128 threshold, not 12% of your whole salary. Below the threshold, nothing at all is deducted for your loan.
This repayment stacks directly on top of your income tax, the ACC Earner's Levy, and any KiwiSaver contribution you've chosen, so a New Zealand payslip with a student loan on it has more moving parts than one without. Once you know the threshold and the flat rate, though, the math is genuinely simple, there are no brackets to navigate the way there are with income tax.
See your own student loan repayment stacked on top of PAYE, ACC levy, and KiwiSaver.
Open the calculatorHow the 12% deduction actually works
Once you're earning above the NZ$24,128 annual threshold (NZ$464 a week, though IRD publishes it as roughly NZ$464/week) and you have a student loan registered with IRD, your employer applies an 'SL' tax code alongside your normal one (commonly M SL or ME SL). From that point, every pay run, IRD's PAYE tables deduct 12% of the portion of that pay period's income sitting above the pro-rated threshold, automatically, alongside your income tax, ACC Earner's Levy, and KiwiSaver.
There's no bracket system here, unlike income tax's 10.5% to 39% progressive bands, student loan repayments use a single flat 12% rate on everything above the line. That makes the arithmetic straightforward: take your income above the threshold, multiply by 0.12, and that's your annual repayment. Auckland, Wellington, and Christchurch salaries all follow the identical rule, IRD doesn't vary the threshold or rate by region.
Worked examples at three salary levels
Figures use the 2026 threshold (NZ$24,128), the 2026/27 IRD income tax brackets, the ACC Earner's Levy, and the standard 3.5% KiwiSaver contribution.
| Gross salary | Income above threshold | Student loan repayment | Net take-home |
|---|---|---|---|
| NZ$45,000 | NZ$20,872 | NZ$2,505 | NZ$33,350 |
| NZ$65,000 | NZ$40,872 | NZ$4,905 | NZ$44,962 |
| NZ$95,000 | NZ$70,872 | NZ$8,505 | NZ$60,280 |
Run your own exact salary through the NZ Student Loan Repayment Calculator.
How this stacks with income tax and KiwiSaver
The student loan repayment is calculated completely independently of income tax, the ACC Earner's Levy, and KiwiSaver, it's simply another line on your payslip. That means moving into a higher tax bracket doesn't change your student loan rate (still flat 12%), and choosing a higher KiwiSaver contribution rate doesn't change your student loan repayment either, since KiwiSaver is deducted from gross pay and the loan repayment is calculated on the same gross figure, not on what's left after other deductions. Each deduction runs its own independent calculation off your gross pay, then they're all subtracted together to land on take-home.
The genuinely good part: it's interest-free
While you're living in New Zealand, no interest accrues on your student loan balance at all. That's a meaningfully different setup from the UK, Australia, or the US, where student debt typically accrues interest that can outpace slow repayments. Interest only starts if you move overseas for more than 183 days, so for most NZ-based borrowers, including anyone weighing an OE, the loan simply sits there shrinking at whatever pace your PAYE repayments manage, with no clock ticking against you.
Model your own student loan repayment
Enter your salary to see your PAYE, ACC levy, KiwiSaver, and student loan repayment all in one place.
Open the New Zealand Student Loan Repayment CalculatorMonthly briefing
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Frequently asked questions
What is the New Zealand student loan repayment threshold for 2026?
NZ$24,128 a year for the 2026 tax year, roughly NZ$464 a week. Earn below that and no compulsory repayment is due. Earn above it and IRD deducts 12% of every dollar over the threshold, not 12% of your whole income.
Is the 12% rate the same for everyone, or does it scale with income like tax brackets?
It is a single flat rate with no brackets at all, unlike income tax's five progressive bands. Whether you earn NZ$30,000 or NZ$300,000, the rate above the threshold stays at 12%. The only thing that changes as your income rises is the dollar amount of income sitting above the threshold, not the rate applied to it.
Does my employer deduct student loan repayments automatically?
Yes, if you tell them about your loan. Your employer applies an 'SL' tax code (M SL or ME SL) alongside your normal tax code, and IRD's PAYE tables handle the 12% deduction automatically every pay run, on top of income tax, the ACC Earner's Levy, and KiwiSaver.
Do I pay student loan repayments on a second job?
Generally yes, once your combined income across jobs crosses the threshold, though the exact mechanics depend on which job uses your primary tax code. If you are juggling multiple income sources, it's worth checking with IRD directly since secondary employment thresholds work slightly differently from a single main job.
Does interest accrue on my NZ student loan while I'm repaying it?
No, not while you live in New Zealand. NZ-based student loans are interest-free, which is a genuinely unusual feature compared to student loan systems in the UK, Australia, or the US. Interest only starts accruing if you move overseas for more than 183 days.
Can I pay off my student loan faster with voluntary extra repayments?
Yes, you can make voluntary payments directly to IRD on top of the automatic 12% PAYE deduction. Since the loan is interest-free while you're NZ-based, there's no interest-saving incentive to rush repayment the way there would be with an interest-bearing loan, so most people weigh this against other financial priorities like KiwiSaver or a house deposit.
How does the student loan repayment interact with my income tax?
They're calculated completely separately and both come out of the same gross pay. Income tax uses progressive brackets (10.5% to 39%), the ACC Earner's Levy is a flat 1.75% up to a cap, and the student loan repayment is a flat 12% above its own threshold. All three, plus any KiwiSaver contribution, stack on top of each other to determine your final take-home pay.
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