Student loan repayment threshold
Here are some important facts about the student loan repayment threshold.
Current threshold
$18,148 for the 2009 tax year. The threshold is adjusted in April each year. See "Previous repayment thresholds" below for other tax years.
How it works
If your annual income is over the threshold you must make repayments to us until the loan is fully repaid. See "Find out more" below, for details on how the repayments process works.
If your annual income is less than the threshold, you don't have to make any repayments until your income rises above the threshold.
What happens when your salary or wage drops below the threshold
If you earn a salary or wage that drops below the threshold, your employer will stop making deductions from your pay.
What you need to repay
For every dollar you earn over the threshold, you'll need to repay 10 cents towards your student loan. The amount you need to repay for the tax year (1 April to 31 March) is called your repayment obligation.
What counts as your income
Any income you earn will be counted, for example salary, rental income, own business income. This doesn't include any income your partner or spouse earns, or any Working for Families Tax Credits you may receive.
What happens if I'm studying?
If you earn over the repayment threshold while you're studying you'll need to make repayments.
Example
Tama's studying marketing at university and working part-time at his Dad's work. During the semester he works 20 hours a week, and in the holidays he works 40 hours a week.
His total income for the tax year is $19,800. As he's earning over the repayment threshold of $18,148 he has to start repaying his loan. The following calculation shows his repayment obligation for the year.
(Annual income - repayment threshold) x 10% = repayment obligation
($19,800 - $18,148) x 10% = $165.20
Previous repayment thresholds
| Tax year | Repayment threshold | Equivalent per week (before tax) |
|---|---|---|
|
1 April 2007 - 31 March 2008 |
$17,784 |
$342 |
|
1 April 2006 - 31 March 2007 |
$17,160 |
$330 |
|
1 April 2005 - 31 March 2006 |
$16,588 |
$319 |
|
1 April 2004 - 31 March 2005 |
$16,172 |
$311 |
|
1 April 2003 - 31 March 2004 |
$15,964 |
$307 |
|
1 April 2002 - 31 March 2003 |
$15,496 |
$298 |
Find out more
Next steps
- Using the correct tax code
- Repayments if you earn a salary or wage
- Repayments if you're self-employed
- Interim repayments
Date published: 08 Apr 2008
Back to top
