Andy: student loan and first full-time job

Andy has recently completed his marketing degree at university and has just got his first full-time job, as a communications advisor with a starting salary of $35,000 a year. After 3 years' study the amount Andy owes on his student loan is $15,000. The loan paid for course fees and some living costs. Now that he's earning money, Andy is keen to start paying his loan off as soon as possible.

In the first week of work, Andy's employer asks for his bank account number, IRD number and tax code. Andy already has his IRD number and tax code details from his copy of the Tax code declaration (IR330) form for his part-time job during varsity, but he isn't sure if his tax code will stay the same now he has a full-time job. Going on to What's Tax? he follows the chart on the downloaded IR330, and finds that because he has a student loan,  is entitled to the independent earner tax credit, and this new job is his main source of income, his tax code will be "ME SL". Andy puts this code on his IR330.

Joining KiwiSaver

Since Andy has just started a new job and meets the criteria, he'll be automatically enrolled in KiwiSaver by his employer. Andy will receive a KiwiSaver employee information pack (KS3) from his employer. Andy will need to complete the KiwiSaver deduction form (KS2) from the KS3 pack, and give it back to his employer. Andy will have 8 weeks to decide whether he wants to remain a member of KiwiSaver or opt out.

Contributions will start being deducted from his first payday and continue unless he decides to opt out.  If Andy decides to opt out of KiwiSaver he'll need to complete a New employee opt out request (KS10) and any deductions made from his wages will be refunded to him.

Andy goes to the KiwiSaver page on What's Tax? to find out about KiwiSaver. From there he links to the KiwiSaver site for more information. He also checks out www.sorted.org.nz - a website that provides free independent information about money matters including KiwiSaver.

Paying back his student loan

Using his tax code, Andy's employer takes out the minimum student loan payments straight from Andy's salary and pays them directly to Inland Revenue, so Andy doesn't have to do anything. Andy's keen to find out how much these student loan payments coming out of his take-home pay will be, so he goes to the Student loan repayment calculator available through What's Tax? to work it out.

While Andy is on the When you've got a student loan section of What's Tax? he reads that he needs to start paying his student loan as soon as his income is greater than the repayment threshold - which means that for every $1 Andy earns over that amount, 10 cents must be paid to Inland Revenue towards repaying his student loan.

Andy's also interested in the interest-free student loan write-offs he's heard about, and wonders if he's eligible. Andy goes to the Student loans section of the main IRD website and finds that he'll be eligible to have the interest on his student loan written off if he's been living in New Zealand for 183 or more consecutive days.