M SL and ME SL: The Student Loan Suffix

SL is not a tax code on its own. It is a suffix that attaches to a main-income code and adds one deduction line to your payslip: 12% of your earnings above $24,128 a year.

M SL and ME SL are the main-income tax codes for someone repaying a New Zealand student loan. PAYE is calculated exactly as it is on M and ME. The suffix adds a separate deduction of 12% on earnings above $24,128 a year, which is $464.00 a week.

MSL, ML and MESL are not New Zealand tax codes

The suffix is written as a separate token with a space in front of it. The four main-income codes are M, M SL, ME and ME SL. Payroll systems reject the run-together forms, and the IR330 asks the student loan question separately rather than offering a combined code. If you have written MSL on a form, the code your employer needs is M SL.

What the SL suffix withholds

Your payslip shows two separate lines, and the totals below add them together so you can see what actually leaves your pay. PAYE is income tax plus the 1.75% ACC earners' levy. The student loan repayment sits underneath it, at 12% of earnings above the threshold.

17.5%income tax

1.75%ACC earners' levy

12%student loan

31.25%of each dollar, $24,129 – $53,500

30%income tax

1.75%ACC earners' levy

12%student loan

43.75%of each dollar, $53,501 – $78,100

Only the first two terms are tax. The third is a loan repayment, so it does not reduce your taxable income and it is never refunded at year end. It reduces what you owe instead. That distinction matters when you compare an SL code against a code without one: the money is gone from your pay either way, but one of them is buying down a balance.

The suffix, against the codes without it

The suffix, against the codes without it
Code	Who it is for	Rate
M	Main income, no student loan	Progressive
M SLthis page	Main income with a student loan	Progressive + 12%
ME	Main income, claiming the independent earner tax credit	Progressive − $520
ME SLthis page	Main income, IETC and a student loan	Progressive − $520 + 12%

The SL rows are this page. The choice between the M pair and the ME pair is made on your total income and the independent earner tax credit, not on the loan.

Every New Zealand tax code, in one table: all tax codes and rates.

Who M SL and ME SL are for

Three facts settle it, and the first two are about your whole year rather than about this employer:

This is your highest-earning source of income. Both codes are main-income codes. On a second job the suffix still applies, but it attaches to a secondary tax instead, and it behaves very differently there.
Your total income from all sources decides M SL or ME SL. Between $24,000 and $70,000 total, with no Working for Families, income-tested main benefit, NZ Superannuation or Veteran's Pension, the code is ME SL. Outside that, M SL.
You have a New Zealand student loan that is not fully repaid. The suffix stays on until Inland Revenue tells your employer to remove it. Being overseas, studying part-time or repaying voluntarily does not change the salary and wages deduction while you are on a New Zealand payroll.

Your pay on tax code M SL

Your income

Tax code

M SLMain income with a student loan

Your result

Gross: $70,000.00
PAYE tax: − $13,220.50
ACC levy: − $1,225.00
KiwiSaver: − $2,450.00
Student loan: − $5,504.64
Take-home: $47,599.86

You keep 68.0% of your gross pay.

The student loan line is 12% of earnings above $24,128 a year, worked out per pay period the way payroll does it. Switch the code in the calculator on the M page to see the same income without the suffix. KiwiSaver is shown at the 3.5% default.

Example 1. $1,200.00 a week on M SL

1.Gross pay for the week$62,400 a year$1,200.00
2.PAYE: income tax plus the ACC earners' levy− $231.39
3.Student loan at 12%Only on the part above $464.00 for the week− $88.32
4.KiwiSaver at 3.5%− $42.00
Into your account$838.29

The student loan line is $88.32 because only $736.00 of that $1,200.00 sits above the $464.00 weekly threshold. Annualised, this earner is repaying $4,593 across the year.

Example 2. $4,500.00 a month on ME SL

1.Gross pay for the month$54,000 a year$4,500.00
2.PAYE: income tax plus the ACC earners' levy− $737.10
3.Student loan at 12%Only on the part above $2,010.66 for the month− $298.72
4.KiwiSaver at 3.5%− $157.50
Into your account$3,306.68

At $54,000 a year this earner is inside the independent earner tax credit band, so the ME half of the code takes $520 a year off PAYE while the SL half adds $3,585 a year of loan repayment. Both examples assume the 3.5% KiwiSaver rate.

On a second job, the SL suffix has no threshold at all

This is the single most miscalculated figure on a New Zealand payslip. The $24,128 a year repayment threshold belongs to your main job only. On any secondary code with an SL suffix, payroll deducts 12% of every dollar from the first one.

A $600.00 weekly shift added to your main job would attract $16.32 of student loan, because only the part above $464.00 counts. The same $600.00 paid by a second employer on an SL code attracts $72.00. That is $55.68 a week of difference from the threshold alone, before any tax.

Add the flat secondary rate on top and an SH SL shift loses 43.75% of its gross. secondary tax in New Zealand.

An SL code is the wrong code for you if…

Your loan is fully repaid. Wait for Inland Revenue to notify your employer rather than removing the suffix yourself. Payroll cannot see your balance.
Your loan is with a lender other than Inland Revenue. The suffix collects New Zealand student loan repayments only. A private loan or an overseas one is not deducted through payroll.
This is not your highest-earning job. The code is a secondary one with the suffix attached, such as S SL or SH SL, and the threshold does not apply to it.
You invoice for the work rather than being on payroll. Schedular payments use WT, which deducts no student loan at all. Your repayment is assessed when you file instead.
You are on a repayment holiday or an Inland Revenue arrangement. Those change what Inland Revenue collects directly, not what a New Zealand employer must deduct from salary and wages.

What happens at the end-of-year square-up

After 31 March, Inland Revenue runs two separate comparisons. One is the tax square-up that every code goes through. The other is a student loan assessment, which compares what was deducted through payroll against 12% of your income above $24,128 for the year as a whole.

Those two assessments do not net off against each other. A tax refund does not cancel a student loan shortfall, and an over-deducted student loan is not refunded the way over-withheld PAYE is. It stays on the loan and reduces the balance sooner.

The shortfall case is the one to watch. Work part of the year on M with no suffix, or start a second job without telling your first employer, and the deduction taken across the year lands below the obligation the year actually generated. Inland Revenue adds the difference to your loan account after the year closes, as one amount rather than spread across paydays. student loan repayments.

Common questions

What is the MESL tax code?

There is no code written MESL. The correct form is ME SL, with a space. Tax code ME, which carries the independent earner tax credit, plus the SL student loan suffix. It applies to your highest-earning job when your total income is $24,000 to $70,000, no exclusion applies, and you have a student loan still being repaid.

Is ML or MSL a New Zealand tax code?

No. Neither exists. The suffix is a separate token with a space in front of it, so the four main-income codes are M, M SL, ME and ME SL. Payroll rejects the run-together forms, and the IR330 asks the student loan question separately rather than offering a combined code.

How much does the SL suffix take from my pay?

On your main job, 12% of everything above $24,128 a year, which is $464.00 a week or $2,010.66 a month. On a second job there is no threshold at all. It is 12% of every dollar that job pays.

Is the student loan deduction part of my tax?

No. It is a loan repayment collected through payroll and it appears as its own line on your payslip, underneath PAYE. It does not reduce your taxable income and it is not refunded at year end. It reduces the balance you owe. How student loan repayments work.

What happens if I leave the SL suffix off my tax code?

Nothing is deducted, so your pay looks higher, but the debt does not move. Inland Revenue compares your income against your loan after 31 March and assesses the repayment you missed, which can be a year of repayments arriving as one bill. changing your tax code stops it growing.

When do I take the SL suffix off?

When the loan is fully repaid. Inland Revenue writes to you and to your employer as the balance approaches nil, and payroll moves you to M or ME from the next pay run. Taking it off before that letter risks under-repaying and being reassessed after 31 March.

Where these figures come from

2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.

student loan repaymentsThe 12% deduction in full, including catch-up rules
tax code MThe same code without the suffix
tax code MEMain income with the $520 independent earner tax credit
secondary taxWhere the SL suffix costs the most
student loan repayment calculatorYour repayment on any income and pay cycle
New Zealand tax codesEvery code and rate in one table