What to do if you're earning money while overseas
Where are you earning your money?
- New Zealand-based borrowers earning money overseas
- Overseas-based borrowers earning money overseas
- Overseas-based borrowers earning money in New Zealand
For information on whether you'll be a New Zealand-based or overseas-based borrower while overseas, see "Find out your status and what to do before you go" under "Find out more" below.
New Zealand-based borrowers earning money overseas
Taxable income
If you're a New Zealand-based borrower you're taxed on your worldwide income. This means you'll need to declare any income you earn outside New Zealand.
Your student loan
We'll include this income with the income you earn in New Zealand when calculating your repayment obligation. For further information on how much you need to repay, see "The repayment threshold" under "Find out more" below.
What you need to do
You'll need to complete an Individual tax return (IR3) at the end of the tax year (31 March). The return must be filed by 7 July, even if you're away during that period. You only need to notify Inland Revenue if you will be (or have been) overseas for six months or more.
If you have an exemption, you are a New Zealand-based borrower even if you are living overseas. Depending on the type of exemption you have, you may be required to declare your worldwide income. For further information on exemptions, see "Exemptions from the 183 day requirement" under "Find out more" below.
Example
After graduating with a BCom in accounting, Kim decided to go on her OE for five months in London before coming back to a full-time job as a graduate accountant. Before she left she contacted Inland Revenue, who told her she'd remain a New Zealand-based borrower while overseas.
Kim earned $5,000 in a part-time job before she left to go overseas in August 2007, and she earned the equivalent of $18,000 while working in London. The following calculation shows how much she'll have to repay for the 2008 tax year:
(Annual income - repayment threshold) X 10% = repayment obligation
She'll need to repay ($5,000 + $18,000 - $17,784) X 10% = $521.60
Kim filed her IR3 tax return, and we sent her an end-of-year repayment calculation showing her repayment obligation for the 2008 tax year. She'll need to pay $521.60 by 7 February 2009.
Overseas-based borrowers earning money overseas
What you need to do
If you're an overseas-based borrower and you earn money overseas you don't need to declare it in New Zealand for student loan purposes. However, you may need to declare it for tax purposes.
Your student loan
You still need to make repayments on your student loan (unless you are on a repayment holiday). We'll calculate your overseas-based repayment obligation based on your loan balance. See "Find out more" below, for details.
Overseas-based borrowers earning money in New Zealand
Taxable income
If you earn money from New Zealand while you're away, for example if you own a property that you rent out, you'll need to declare this income.
Your student loan
This income doesn't affect your student loan repayments. As you're an overseas-based borrower, we calculate your repayments based on your loan balance. See "Find out more" below, for details about non-resident repayments.
What you need to do
The first year you're away
You'll need to complete an Individual tax return (IR3) at the end of the tax year (31 March). This return must be filed by 7 July and you'll need to clearly show the breakdown of income received before and after your departure.
All subsequent years
You'll need to file a Non-resident income tax return (IR3NR) showing only your income earned in New Zealand at the end of the tax year (31 March). This return must also be filed by 7 July.
Send both returns to:
Non-resident Centre
Inland Revenue
Private Bag 1932
Dunedin
Find out more:
- Student loan borrowers travelling or based overseas
- Repaying your loan if you're based overseas
- Repayment holiday
- Exemptions from the 183-day requirement
Next steps
Date published: 16 Apr 2007
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