It is important to use the right tax code when you are working. If you are a salary or wage earner and have a student loan you need to add SL to your tax code. This tells your employer you have a student loan and they need to make deductions to pay it off.
When you live in New Zealand your student loan repayments depend on:
- how much you earn
- if it is your main or secondary job.
Student loan repayments for your main job
You repay 12% of every dollar you earn over the repayment threshold. The repayment threshold depends on how often you are paid.
|Pay period||Threshold before tax|
|Every 4 weeks||$1,560|
For example, if you earn $600 a week before tax, your repayment will be $25.20 (($600 - $390) x 0.12 = $25.20).
If you earn more than the weekly, fortnightly, 4-weekly or monthly threshold amount, but less than the annual threshold amount, you may not have to make repayments. This is a repayment deduction exemption, and only applies if you are studying or thinking about studying.
Student loan repayments for your secondary job
If you have a secondary job, you generally repay 12% of every dollar of your secondary income before tax. The threshold does not apply to income from secondary jobs.
For example, if you earn $200 a week before tax in a secondary job, your repayment will be $24 ($200 x 0.12 = $24).
If you have more than 1 job you may be able to apply for a special deduction rate. This will reduce the size of your repayments. If you earn less than the repayment threshold from your main job, you can apply for a special deduction rate for your secondary job.
Difficulty with student loan repayments
If you cannot afford to make your student loan repayments, let us know and we can talk about other options with you.
Making extra repayments to your student loan
If you want extra repayments to come out of your pay automatically, just tell your employer how much extra you want to pay. They will send us the extra amount along with your standard deductions. It is probably a good idea to do this in writing, for example, send your employer an email and check they are making the right deduction.
If you want to make extra repayments yourself there are a couple of ways to do this. For example, you can make a one-off payment any time, or set up regular payments from your bank account either as a direct credit or direct debit. To set up a direct debit:
- log in to myIR
- go to your student loan account
- select 'make a payment' and follow the instructions.
If you have not paid the right amount towards your student loan, we can help you fix this.