New Zealand student loan repayments are managed by IRD (Inland Revenue). For most borrowers, repayments happen automatically through PAYE — deducted from your salary by your employer — so you never need to manually send money to IRD.
• Repayment rate: 12 cents per $1 earned above the threshold
• Annual repayment threshold: ~$22,828 (check ird.govt.nz for current figure)
• PAYE employees: automatic deduction by employer
• Self-employed: paid with your annual IR3 return
• No interest while living in NZ — you only repay what you borrowed
How the Repayment Threshold Works
You don’t repay anything on income below the repayment threshold. Once your income exceeds this threshold, you repay 12 cents per dollar on the amount above it.
2026 annual repayment threshold: ~$22,828
Example calculations:
| Annual income | Amount above threshold | Annual repayment (12%) |
|---|---|---|
| $30,000 | $7,172 | $860 |
| $45,000 | $22,172 | $2,660 |
| $60,000 | $37,172 | $4,460 |
| $80,000 | $57,172 | $6,860 |
| $100,000 | $77,172 | $9,260 |
PAYE Employees
If you work for an employer who pays PAYE (most salaried employees), repayments are:
- Automatically deducted from your wages alongside income tax
- Paid to IRD by your employer each pay period
- Reflected in your IRD MyIR account
Tell your new employer that you have a student loan when you start. They will apply the correct PAYE student loan deduction rate automatically if you tick the student loan box on your IR330 tax code form.
Self-Employed and Contractors
If you’re self-employed or have income not subject to PAYE:
- You pay student loan repayments through provisional tax during the year (if your income is above the threshold and you have a provisional tax obligation)
- You also declare and pay via your annual IR3 (income tax return) at the end of the financial year (31 March)
- IRD will calculate what you owe and issue a bill or refund accordingly
Self-employed borrowers are responsible for setting aside the repayment amount themselves — unlike PAYE workers, it’s not automatic.
Multiple Income Sources
If you have both employment income and self-employed income:
- PAYE deductions apply automatically to your employment income
- The IR3 process reconciles total repayments at year end
- You may need to make additional payments if your self-employed income took you above threshold
Hardship and Repayment Difficulty
If you’re experiencing financial hardship, you can apply to IRD for a repayment holiday or reduced repayments. Eligibility criteria apply and hardship must be demonstrated. A repayment holiday pauses mandatory deductions temporarily but the loan balance stays the same (no interest accrues in NZ).
How Long Does It Take to Repay?
With automatic PAYE deductions, most New Zealanders repay their student loan within 8–15 years depending on salary progression and whether voluntary repayments are made.
Example:
- Starting balance: $25,000
- Starting salary: $55,000 (repaying ~$3,860/year)
- Salary growth: 3% per year
- Time to repay: approximately 7–9 years
Because there’s no interest while living in NZ, every dollar of repayment reduces your balance by a dollar. There’s no rush — but there’s also no cost to repaying early.
For strategies on repaying faster, see Paying Off Your Student Loan NZ.
Checking Your Balance
Log in to your IRD MyIR account (ird.govt.nz) to see:
- Current loan balance
- YTD repayments
- Repayment history
You can also call IRD on 0800 377 778.