Student Loan Repayment
Definition
Repayment of NZ student loans, calculated at 12% of income exceeding the repayment threshold, deducted via PAYE.
Key Takeaways
- Student loan repayments are 12% of income exceeding $24,128 annual threshold (2025-26).
- Automatically deducted via PAYE for NZ-based earners above the repayment threshold.
- NZ student loans are interest-free for NZ residents; interest applies if overseas 6+ months.
- Voluntary lump-sum payments allowed with no early repayment penalties.
Detailed Explanation
New Zealand student loan repayments are automatically deducted from your wages through the PAYE system if you earn above the repayment threshold. For the 2025-26 tax year, the repayment threshold is $24,128 annually (approximately $464 per week). Once your income exceeds this threshold, you pay 12% of every dollar earned above it towards your student loan.
NZ student loans are interest-free for NZ-based borrowers, meaning the loan balance does not grow while you remain in New Zealand. However, if you move overseas for more than 6 months, your loan starts accruing interest. You can make voluntary lump-sum payments to pay off your loan faster, and there are no penalties for early repayment. Your loan balance and repayment history are tracked by Inland Revenue (IRD).