Pay, PAYE and student loans

What is the student loan repayment threshold?

Last verified · Methodology

What it means

New Zealand-based borrowers repay their student loan through their pay once they earn more than the repayment threshold. The threshold is $24,128 a year, which works out to $464 a week, $928 a fortnight or $2,010.66 a month. The repayment rate is 12% of everything earned over it in each pay.

The threshold has been held at $24,128 rather than rising each year, so more of each pay rise goes to the loan. Loans are interest-free while you are New Zealand-based. Secondary jobs do not get a threshold: 12% of all secondary pay is deducted when you use an SL secondary code.

How it is worked out

Annual repayment = (income - $24,128) x 12%

Example

On a salary of $55,000, compulsory repayments come to $3,704.64 for the year. A monthly pay of $5,000 has $358.72 deducted.

Run the numbers

Open the Student loan repayment calculator

Related terms

Tax code MTax code M is the main tax code for your only or highest-paying job. ME adds the independent earner tax credit, and SL adds student loan deductions.PAYE (Pay As You Earn)PAYE is the income tax and ACC earners' levy your employer takes out of each pay and sends to Inland Revenue, based on the tax code you give them.IRD numberYour IRD number is the eight or nine digit number Inland Revenue uses to identify you for tax, KiwiSaver, student loans and Working for Families.
Student loan repayment threshold: common questions

The student loan repayment threshold is $24,128 a year. Above it, 12 cents of every dollar of salary or wages goes to your loan.

Not while you are New Zealand-based. IRD treats you as New Zealand-based if you are in the country for 32 days or more in any 184-day period. Once you become overseas-based, interest is charged from the day after you left.

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