If you’re a sole trader, contractor, or freelancer, you need to make student loan repayments on your income. But how do you calculate them?
If you have a student loan, as soon as you earn more than $20,020 you’re required to make repayments.
If you’re self-employed or earn income from other sources, you repay your student loan along with your income tax.
The amount of your student loan repayments depends on your adjusted net income.
Paying off your student loan if you’re self-employed(external link) — Inland Revenue
Your end-of-year repayment is 12 percent of every dollar you earn over the student loan repayment threshold (currently $20,020).
You can manage your student loan using myIR, and if you’re having trouble meeting your repayment obligations, you can contact Inland Revenue through myIR or phone to discuss your situation. They might be able to offer some repayment options.
Register for myIR(external link) — Inland Revenue
Anna is a freelance writer. In her first year of business after graduating university, she earns $40,000. This self-employed income is her only income for the year.
To calculate her end-of-year student repayment, she subtracts the annual repayment threshold from her income (currently $20,020), and multiplies the difference by 12 percent.
|Adjusted net income (income aside from salary and wages)||$40,000|
|Adjusted net income – annual repayment threshold ($40,000 - $20,020)||$19,980|
|End-of-year repayment ($19,980 x 0.12)||$2,397.60|
You can find more examples on the Inland Revenue website(external link).
Contact Inland Revenue on 0800 377 778.