How a pay rise changes your student loan repayments (and your take-home)

The 12% above the threshold, explained

If you have a New Zealand student loan and earn salary or wages, your employer deducts repayments from each pay when you use a tax code with SL. For the 2026/27 year, the repayment threshold is $24,128 a year, which is $928 a fortnight, and you repay 12% of your pay above it. Most payslips show the student loan deduction as its own line, which is the quickest way to check your employer is using the right code.

The deduction is worked out on each pay, so a large one-off payment such as a bonus brings a larger repayment that pay. If you have a second job on a secondary tax code, there is no threshold on it at all: 12% of every dollar from the second job goes to the loan. Loans are interest-free while you are based in New Zealand, so the repayments reduce the balance itself.

Worked examples at three salaries

At 2026/27 rates, on tax code M, with ACC at 1.75% and KiwiSaver at 3.5%:

The figures leave out the independent earner tax credit, which Inland Revenue pays at up to $520 a year on incomes from $24,000 to $66,000, reducing to nothing at $70,000. If you qualify, the $50,000 figures would be a little higher.

Why a $5,000 rise is not $5,000

Every extra dollar of pay is taxed at your highest rate, and the loan takes 12% of it as well. On $70,000, each extra dollar loses 30% in PAYE, 1.75% in ACC, 3.5% in KiwiSaver and 12% to the loan, so a little over half reaches you.

• On $50,000, a $5,000 rise adds about $3,075 a year, or $118 a fortnight. Part of the rise is taxed at 17.5% and part at 30%, because it crosses $53,500.
• On $70,000, it adds about $2,638 a year, or $101 a fortnight.
• On $90,000, it adds about $2,488 a year, or $96 a fortnight.

A rise is still worth having, and the part that goes to the loan still pays down your own debt. What changes is how you judge it: think in take-home terms when you compare offers or plan your budget. The Offer Comparer works out two offers after tax with or without a student loan, at 2026/27 rates, with no account needed.

Voluntary repayments and when they make sense

You can make extra repayments to Inland Revenue at any time. Because the loan is interest-free while you live in New Zealand, paying it off early does not save interest, and money kept in savings or used to repay higher-interest debt usually does more for you. Extra repayments can make sense if you plan to move overseas, where interest is charged on the loan, or if clearing the balance sooner would raise your take-home for a goal such as a home deposit.

Inland Revenue can approve a special deduction rate if you have more than one job and earn less than the repayment threshold from your main job, and an exemption from deductions if you are studying full-time and expect to earn under the threshold for the year. Check the details on its website before you apply. Your myIR account shows the balance and each repayment, so you can see how quickly the loan is coming down before deciding whether to add to it. Our guide to getting your first job out of study covers the rest of starting out.

Seeing the after-loan number on every job

When you compare jobs, the loan changes what each one is worth to you, especially between offers in different tax bands. Look at every job on the same after-loan basis rather than the headline salary.

In jobtracker.co.nz, you tick once that you have a student loan, and every job you track shows its take-home pay after tax, ACC, KiwiSaver and the loan, so the jobs are compared on what would actually reach your account. When the loan is paid off, untick it, and every job's figure moves to the no-loan number.

See the after-loan number on every job