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Repaying my student loan when I earn salary or wages

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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. 

Tax codes for individuals

Deductions

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
Weekly $380
Fortnightly $760
Every four weeks $1,520
Monthly $1,647

For example, if you earn $600 a week before tax, your repayment will be $26.40 (($600 - $380) x 0.12 = $26.40).

If you earn more than the weekly, fortnightly, four-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 repayment deduction exemption

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 one 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.

Student loan special deduction rate

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.

Hardship and defaulting on my student loan

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. 

Paying off my student loan faster

Incorrect repayments

If you have not paid the right amount towards your student loan, we can help to fix this.

Student loan overpayments

Student loan underpayments