NZ Student Loan Repayment Calculator 2027

How the 12% Repayment Works

NZ student loan repayments are deducted at 12% of gross income above the IRD threshold of NZ$24,128 per year (the 2026-27 figure). Below that threshold, repayments pause. Repayments are typically PAYE deductions through your employer using the SL tax code, so you don't need to budget separately — the deduction comes out of every paycheck above the threshold.

NZ-Based vs Overseas-Based

While you live in New Zealand, your loan is interest-free under the Student Loan Scheme Act 2011. Once you move overseas for more than 183 days, IRD charges interest (approximately 4.4% for 2026-27, set annually). Overseas borrowers must make minimum annual repayments based on loan size — not income — and missed payments accrue penalties. Many overseas borrowers benefit from voluntary lump sum payments to shorten loan life.

Lump Sums and Strategic Payoff

The IRD voluntary repayment bonus (5% match for payments over $500) ended on 1 April 2013, but voluntary payments themselves remain free of interest or penalty. For NZ-based borrowers, the question is opportunity cost: voluntary payments save no interest (the loan is already interest-free), so paying down a loan vs investing depends entirely on whether you would otherwise invest the lump sum. For overseas-based borrowers, voluntary lump sums save real interest at 4.4%+.

When You Must File a Return

If you only earn PAYE wages, your repayments are usually automatic and no return is needed. If you have additional income (rental, self-employment, overseas income), file an IR3 — IRD will calculate your additional repayment obligation based on total income above threshold. Failure to declare overseas income is treated seriously and can result in court orders preventing border departure for non-compliant borrowers.

Sources: ird.govt.nz Student Loan Scheme 2026-27, studylink.govt.nz. Last updated: May 2026.