Many of our clients have student loans or have family with student loans and these are repayable to Inland Revenue either through PAYE wages or at the end of year when completing a client's tax calculation.
From the 1st April 2022, any amount a tax payer earns over $21,268 will be subject to a Student Loan repayment of 12%, for a person living in New Zealand. So if a person earns $50,000 a year, the student loan repayable is $3,447.84.
However with the Covid restrictions being removed, if you are intending on moving overseas, the rules are easy. If you are overseas for 184 consecutive days or more, you are considered to be absent from New Zealand. You then become subject to daily interest being charged (currently 3%pa) and different repayment obligation amounts on your student loan, if this is the case please contact us.
Overseas based borrowers have a duty to notify Inland Revenue and provide them with the data required in order to remain in contact and determine their overseas income.
Overseas based borrowers are also able to apply for a Temporary Repayment Suspension if contact to the IRD is made within 183 days, the holiday is available for a period of 365 days.
If you are unable to pay your obligations, please contact us "or Inland Revenue" as currently the late payment interest cost is 7% pa. If you try to avoid your obligations there are also penalty costs imposed by Inland Revenue.
If you have any queries, please don’t hesitate to get in touch with us.
Written by Mark Doggett