If you have a New Zealand student loan and earn salary or wages, repayments come straight out of your pay. Here's how it works for the 2026/27 tax year.

The basics

  • You repay 12% of every dollar you earn over the repayment threshold.
  • The annual threshold is $24,128 — about $464 a week, $928 a fortnight or $2,010.66 a month.
  • Your employer deducts it automatically when you use an SL tax code (e.g. M SL).

Main job vs second job

The threshold only applies to your main job:

  • Main job (M SL / ME SL): you repay 12% of pay above the pay-period threshold.
  • Second job (S SL, SH SL, etc.): the threshold is already used by your main job, so you repay 12% of the whole amount — from the first dollar.

If your main job pays less than the threshold, you can ask IRD for a special deduction rate so you're not over-deducted on the second job.

Worked example

On an $80,000 salary (main job): you earn $55,872 over the $24,128 threshold, so your annual repayment is about $6,704 (12%). If you also earned $10,000 in a second job with an SL code, that adds $1,200 (12% of $10,000, no threshold).

Are NZ student loans interest-free?

Yes — while you are New Zealand-based, your student loan is interest-free. Unlike some overseas systems (for example Australia's, where the balance is indexed upward each year), a NZ-based loan is not increased by annual indexation. Your balance only goes down as you repay.

Overseas-based borrowers are different: interest is charged, and repayments are usually fixed amounts based on your loan balance rather than a percentage of NZ income. If you're heading overseas for more than about 6 months, check your obligations with IRD.

See it on your payslip

Turn on "student loan" in the NZ Pay Calculator to see the deduction, or read about secondary tax codes for second jobs.