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Student Loan

Student Loan is a scheme formed to help students to manage their finances during before, during and after the studies (Visit Study link to know more about it

With Effect from 1st January 2018, the first year of tertiary education is free. However, for the following years you still have to apply for loan.


Student Loan Repayments

  • Working in New Zealand

 If your salary is above the specified threshold then you repay 12% of every dollar earned over the threshold.

If you are paid












Suppose Chris earns $1,140.58 fortnightly before tax, student loan repayment for him will be $ 47.11 ($1140.58 - $748 = $392.58, 12% of $392.58)

Please note that thresholds are only applicable for primary job, if in case Chris is working somewhere also and he is receiving $400 fortnightly then student loan deduction on this income will be $48.00 ($400 *12 %), as a result total student loan repayment will be $95.11 for the respective fortnight.

In case of under deduction of student loan, sometimes IRD asks for extra deductions @41.67% of standard deduction. So, for Chris extra deduction will be $19.63 ($47.11 * 41.67%).

  • Self Employed

If you are self-employed then end of year repayment is 12% of every dollar earned over annual repayment threshold of $19,448, provided your annual adjusted net income is $1,500 or more. This means to pay student loan your adjusted total income should be $20,948 or more (including salary or wages)

Let’s work it out with an example:

Suppose Chris earns following income during the tax year-

Salary & Wages: $16,000

Adjusted net income $ 9,850

Now we will first deduct the annual threshold from salary and wages and balance from adjusted net income.

Annual repayment threshold: (16,000-19,448 = -3,448)

Balance adjustment: $9,850-3,448 = $6,402

Student loan repayment: $6,402 * 12% = $768.24

As adjusted net income is more than $1,500 so it qualifies the condition and hence Chris must pay student loan repayment of $768.24 for the tax year.


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