Student Loan Repayment Obligations

Salary and wage earners no longer need an annual calculation

Clarifying New Zealand-based borrowers’ student loan repayment obligations
Most New Zealand-based student loan borrowers (those who have salary or wage income) no longer need an annual calculation to determine their repayment obligation.

Instead these borrowers will have student loan deductions made from
their salary and wages, and as long as these amounts are within an acceptable level these deductions will become their repayment obligation. A repayment threshold is still taken into account and is now based on a pay-period threshold (currently $367 if paid weekly or $734 if paid fortnightly) rather than the annual threshold.

If a borrower has other income (not salary or wages) they will have an end-of-year repayment obligation. Salary or wage income is excluded from the end-of-year calculation.

The “End of year repayment obligation” notice issued for the 2014 tax year shows the amount due for payment – student loan deductions from salary and wages aren’t deducted from this amount.

Also, from 1 April 2013, the repayment rate for New Zealand-based borrowers increased to 12%.