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Student Loan Scheme Act 2011

Repayment obligations of borrowers - Repayment obligations for New Zealand-based borrowers with income other than, or as well as, salary or wages

78: Calculation of borrower's end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold

You could also call this:

“How the government works out how much of your student loan you need to pay back each year if you earn enough money”

When you earn money from a job and it’s the same as or more than a certain amount in a year, the government has a way to figure out how much of your student loan you need to pay back. They use a simple math formula to do this.

The formula looks like this: the amount you need to pay = a percentage of your income. The percentage they use is called the repayment percentage. Your income is the money you earn in a year, after some adjustments are made.

This calculation happens at the end of each tax year. It only applies to you if you earn enough money from your job to reach the yearly repayment amount set by the government.

Remember, this is just how they calculate what you owe. It doesn’t mean you have to pay it all at once. The government uses this information to work out your repayments for your student loan.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3180175.

Topics:
Education and learning > Higher education Money and consumer rights > Banking and loans
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Part 2 Repayment obligations of borrowers
Repayment obligations for New Zealand-based borrowers with income other than, or as well as, salary or wages

78Calculation of borrower's end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold

  1. Subsection (2) applies if, in relation to a tax year,—

  2. this subpart applies to a borrower; and
    1. the gross income that the borrower derived from salary or wages is equal to or more than the annual repayment threshold.

      1. The borrower’s end-of-year repayment obligation for the tax year must be calculated in accordance with the formula—

        a = b × c

        Where:

        • a a

          is the borrower’s end-of-year repayment obligation for the tax year

        • b b

          is the repayment percentage

        • c c

          is the income that the borrower derives from adjusted net income for the tax year.

      Notes
      • Section 78: replaced (with effect on 1 April 2012 and applying for 2012–13 and later tax years), on , by section 14 of the Student Loan Scheme Amendment Act 2013 (2013 No 10).