NZ Student Loan Repayment Guide: How Much Do You Repay?
A complete guide to New Zealand student loan repayments — threshold, rate, automatic deductions, and how to pay off your loan faster.
Published 8 February 2026
New Zealand’s student loan system is unique — loans are interest-free for NZ-based borrowers and repayments are automatically managed through the PAYE system.
Repayment Threshold and Rate
You only repay student loan when your income exceeds the repayment threshold.
| Detail | 2025-26 | 2024-25 |
|---|---|---|
| Threshold | $22,828/year ($439/week) | $22,828/year ($439/week) |
| Rate | 12% above threshold | 12% above threshold |
No repayments are required if your income is below $22,828.
How Repayments Are Calculated
Formula: (Gross income − $22,828) × 12%
Example: $50,000 salary
- Repayable income: $50,000 − $22,828 = $27,172
- Annual repayment: $27,172 × 12% = $3,260.64
- Monthly: $271.72 | Weekly: $62.71
Example: $80,000 salary
- Repayable income: $80,000 − $22,828 = $57,172
- Annual repayment: $57,172 × 12% = $6,860.64
PAYE Deductions
If you’re employed, repayments are automatically deducted by your employer alongside PAYE tax. You must tell your employer you have a student loan — they’ll use the correct tax code (e.g. M SL instead of M).
If you’re self-employed, repayments are made through provisional and terminal tax.
Interest
For NZ-based borrowers, there is no interest on student loans. Interest only accrues if you:
- Live outside New Zealand for more than 183 days, or
- Fail to make required repayments
Paying Off Your Loan Faster
You can make voluntary extra repayments through myIR at any time. There is no penalty for early repayment. Extra payments reduce your loan balance directly.
Overseas Borrowers
If you move overseas for more than 183 days, interest starts accruing (currently 3.5–5% depending on circumstances). You must make scheduled repayments directly to IRD based on your worldwide income.
Use our Student Loan Calculator to estimate your annual repayments.