Financial Checklist for New Graduates
Contents (9 sections)
Five things matter most when you start your first job in NZ: understand what's being deducted from your pay, set up an emergency fund, check your KiwiSaver fund, know how your student loan repayment works, and start a basic budget. Get these five right in your first few months of work and you're ahead of most people twice your age.
1. Understand your payslip
Your first payslip will be smaller than you expect. On a $50,000 graduate salary, roughly $12,700 disappears before it hits your bank account. Here's where it goes:
| Deduction | How it's calculated | Annual amount on $50,000 | Weekly impact |
|---|---|---|---|
| PAYE income tax | Progressive rates from 10.5% to 30% | $7,420 | $142.69 |
| ACC earner's levy | 1.67% of gross income (IRD, 2025-26) | $835 | $16.06 |
| KiwiSaver (at 4%) | 4% of gross pay | $2,000 | $38.46 |
| Student loan repayment | 12% of income above $22,828 | $3,261 | $62.71 |
| Total deductions | $13,516 | $259.92 | |
| Take-home pay | $36,484 | $701.62 |
(IRD 2025-26 tax rates, ACC levy rate, KiwiSaver Act 2006, Student Loan Scheme Act 2011. KiwiSaver at 4%, the default rate from April 2028. The current default may be 3% or 3.5%.)
That's $702 per week in your pocket on $50,000 at 4% KiwiSaver. If you don't have a student loan, it's $764 per week.
Check your tax code. Your employer will ask you to fill in a Tax code declaration (IR330). Most new graduates on a single job with a student loan use the tax code "M SL". If you don't have a student loan, it's just "M". Getting this wrong means you'll either overpay tax all year (and wait for a refund) or underpay and owe money at tax time (IRD).
2. Set up an emergency fund (even a small one)
Before you think about investing, holidays, or big purchases, put a buffer between you and your credit card. A $1,000 emergency fund covers the most common surprises: a car repair, a vet bill, an urgent dental visit.
On $702/week take-home (with a student loan), saving $30/week gets you to $1,000 in about 8 months. Saving $50/week gets you there in 5 months.
How to do it:
- Open a separate savings account with your bank (most let you do this through internet banking in 2 minutes)
- Set up an automatic transfer for payday
- Don't touch it unless it's a genuine emergency
Once you've hit $1,000, keep building towards 3 months of essential expenses. On a graduate salary, that's roughly $5,000 to $7,500 depending on your rent and fixed costs. Read the full emergency fund guide for where to keep it and how to grow it.
3. Check your KiwiSaver fund
If you're employed, you're automatically enrolled in KiwiSaver after your first 4 weeks of work (unless you opt out within weeks 2 to 8). Your employer picks a default scheme if you don't choose one yourself (KiwiSaver Act 2006, IRD).
The problem with default funds: they're usually conservative. That's fine if you're retiring next year. If you're 22, your money has 40+ years to grow. A conservative fund earning 4% per year instead of a growth fund earning 7% per year could cost you over $100,000 by retirement on the same contributions (Sorted.org.nz retirement calculator, based on 3% contributions on median salary).
What to do now:
- Find out which KiwiSaver provider and fund you're in. Check your payslip or log into myIR (ird.govt.nz). If you've never chosen a provider, you're in a default fund.
- Pick a fund type that matches your timeline. At 20 to 30 years old with 35+ years until retirement, a growth or aggressive fund has historically delivered the best long-term returns, though with more short-term ups and downs.
- Choose your contribution rate. The options are 3%, 4%, 6%, 8%, or 10% of your gross pay. The default is 3% (rising to 3.5% from April 2026 and 4% from April 2028). Your employer matches at least the minimum rate, so you're getting free money on top (IRD).
- Claim your government contribution. The government contributes 50 cents for every dollar you put in, up to $521.43 per year. To get the full amount, you need to contribute at least $1,042.86 between 1 July and 30 June (IRD). On 4% of a $50,000 salary, you're contributing $2,000/year, so you'll get the full government contribution automatically.
Read more about choosing a KiwiSaver fund and KiwiSaver contribution rates.
4. Understand your student loan repayment
If you have a student loan and you're working in NZ, repayments start automatically once you earn above $22,828 per year ($439 per week). The rate is 12 cents for every dollar above that threshold (IRD, Student Loan Scheme Act 2011).
| Salary | Weekly repayment | Annual repayment |
|---|---|---|
| $40,000 | $39.53 | $2,061 |
| $45,000 | $48.45 | $2,661 |
| $50,000 | $62.71 | $3,261 |
| $55,000 | $74.18 | $3,861 |
| $60,000 | $85.64 | $4,461 |
(IRD, 2025-26 repayment threshold of $22,828.)
Key things to know:
- No interest while you live in NZ. Student loans are interest-free as long as you're a NZ-based borrower. There's no financial benefit to paying it off faster (unlike a mortgage or credit card), because no interest is accruing (IRD).
- If you go overseas for more than 184 days, interest kicks in at a rate set annually by IRD (currently around 3.1%). Going on your OE? Factor this in (IRD, Student Loan Scheme Act 2011).
- Voluntary repayments are an option if you want to clear the loan faster, but the money is often better directed towards an emergency fund, KiwiSaver, or investing, since the loan is interest-free while you're in NZ.
- Check your balance on myIR (ird.govt.nz). The average student loan balance at graduation is approximately $23,000 (Ministry of Education, 2024).
Read the full student loan repayment guide for more detail.
5. Start a basic budget
You don't need a spreadsheet or an app (though both work). You need to know three numbers: what comes in, what goes out on fixed costs, and what's left.
Here's a realistic budget for a graduate earning $50,000 with a student loan, flatting in Wellington:
| Category | Weekly | Monthly | % of take-home |
|---|---|---|---|
| Take-home pay | $702 | $3,042 | 100% |
| Rent (flatting, Wellington) | $250 | $1,083 | 35% |
| Food and groceries | $100 | $433 | 14% |
| Transport (bus pass) | $30 | $130 | 4% |
| Power/internet (share) | $35 | $152 | 5% |
| Phone | $15 | $65 | 2% |
| Insurance (contents) | $8 | $35 | 1% |
| Savings (emergency fund) | $50 | $217 | 7% |
| Left for personal spending | $214 | $927 | 30% |
(IRD 2025-26 rates, MBIE Tenancy Services median rents Wellington 2025, Stats NZ household expenditure data.)
$214/week for everything else: clothes, socialising, entertainment, subscriptions, personal care. That's not lavish, but it's workable, and it includes $50/week going straight to savings.
The 50/30/20 rule (50% needs, 30% wants, 20% savings) is a useful target. On a graduate salary with Wellington rent, you'll probably land closer to 60/25/15. That's fine. The point is having a plan rather than guessing.
Savings strategies that work covers different approaches to building savings in more detail.
Worked example: First-year financial setup on $50,000
Meet the scenario: A 22-year-old starting their first job in Wellington at $50,000. Student loan of $24,000. No savings. Default KiwiSaver fund at the minimum rate (3%, rising to 3.5% from April 2026 and 4% from April 2028).
Month 1 to 2: The basics
- Confirm tax code is "M SL" with employer
- Open a separate savings account (on-call, no fees)
- Set up $50/week automatic transfer to savings on payday
- Log into myIR and check KiwiSaver provider and fund type
Month 3 to 4: KiwiSaver check
- Switch from default conservative fund to a growth fund (this can be done through your provider's website or by switching providers entirely)
- Confirm contribution rate is at least the minimum (the minimum to get the full employer match and government contribution)
Month 5 to 6: Emergency fund milestone
- $1,000 saved. Keep the $50/week going towards a 3-month target of $6,000
End of year 1:
- Emergency fund at approximately $2,600 (plus interest)
- Student loan reduced by approximately $3,261 through automatic deductions
- KiwiSaver balance growing with employer match and government contribution
- Take-home pay understood, budget running, no credit card debt
That's a strong foundation. No fancy tricks needed.
Financial goals for your first year of work
| Priority | Action | Why it matters |
|---|---|---|
| 1 | Confirm your tax code is correct | Avoids owing tax or waiting months for a refund |
| 2 | Build $1,000 emergency fund | Stops you using credit cards for surprises |
| 3 | Switch KiwiSaver to a growth fund | 40 years of compounding at a higher return makes a massive difference |
| 4 | Know your student loan balance and repayment rate | No surprises, and you can plan around it |
| 5 | Run a basic budget for 3 months | You'll know exactly where your money goes |
| 6 | Get contents insurance ($5 to $10/week) | Covers your stuff if there's a fire, flood, or burglary |
| 7 | Set up a second savings goal (holiday, car, or house deposit) | Once the emergency fund is underway, give your money a purpose |
Common questions
What tax code do I use for my first job?
If it's your only job and you have a student loan, use "M SL". If it's your only job and you don't have a student loan, use "M". If you have a second job, the second job typically uses "S" or "S SL". Your employer will give you a Tax code declaration form (IR330) to fill in, or you can update your tax code through myIR (IRD).
Do I have to join KiwiSaver?
You're automatically enrolled after 4 weeks of employment in NZ. You can opt out between weeks 2 and 8 by filling in a KiwiSaver opt-out request (KS10) form from IRD. After that window closes, you're in until you reach 65. Opting out means missing out on the employer contribution (at least 3% of your pay, rising to 3.5% from April 2026 and 4% from April 2028) and the government contribution (up to $521.43/year). For most new graduates, staying in at the minimum rate makes sense (IRD, KiwiSaver Act 2006).
How do student loan repayments work?
Your employer deducts 12% of every dollar you earn above $22,828/year (about $439/week). On a $50,000 salary, that's $62.71/week or $3,261/year. It's automatic and comes out of your pay alongside PAYE and ACC. The loan is interest-free while you live and work in NZ (IRD, Student Loan Scheme Act 2011).
Is it worth paying off my student loan faster?
While you live in NZ, your student loan is interest-free. That means there's no cost to carrying the balance. The money you'd put towards extra repayments is usually better directed towards building an emergency fund, growing your KiwiSaver, or investing, where it can earn a return. If you're planning to move overseas, different story: interest starts accruing, so paying it down before you leave makes more sense.
What KiwiSaver fund should a new graduate choose?
At 22 to 25, you have 40+ years until you can withdraw. That long timeframe means you can ride out short-term market drops. A growth or aggressive fund has historically delivered higher returns than conservative or balanced funds over 20+ year periods (Sorted.org.nz, Disclose Register fund performance data). The key factor is time, not your risk tolerance in any given week.
How much of my pay should I save as a new graduate?
Aim for 10% to 15% of your take-home pay if you can manage it. On a $50,000 salary with a student loan, that's roughly $70 to $105/week. If rent is high and the budget is tight, even $30/week builds a $1,560 buffer over a year. Consistency matters more than the amount. Start small and increase it when you get a pay rise.
Do I need insurance in my first job?
Contents insurance (covering your belongings against theft, fire, or natural disaster) costs roughly $5 to $10/week and is worth having from day one. You don't need life insurance or income protection at this stage unless you have dependents or significant debt beyond your student loan. Your employer covers ACC for workplace injuries, and you're covered by the public health system. Review insurance needs again if your circumstances change (partner, mortgage, children).
What happens to my tax at the end of the year?
IRD does an automatic income tax assessment after 31 March each year for most salary and wage earners. If you've been on the right tax code all year, you'll either get a small refund, owe a small amount, or be exactly right. You'll see the result in your myIR account, usually by July. If you owe under $50, IRD typically writes it off. If you're owed a refund, it goes straight to your bank account (IRD).
What's the median graduate salary in NZ?
The median starting salary for a bachelor's degree graduate is approximately $48,000 to $52,000, depending on the field of study (Ministry of Education, Graduate Outcomes data 2024). Engineering, IT, and health science graduates tend to start higher ($55,000 to $65,000), while arts, education, and social science graduates typically start lower ($42,000 to $48,000).
What to do next
- Calculate your take-home pay to see exactly what lands in your bank account
- Compare KiwiSaver funds to find the right fund for your age and goals
- KiwiSaver contribution rates explained to understand the real cost of each rate
- Student loan repayment guide for the full breakdown of thresholds and overseas rules
- Emergency fund guide for how much to save and where to keep it
Last updated: 1 March 2026. Sources: IRD (ird.govt.nz), Employment NZ (employment.govt.nz), Stats NZ (stats.govt.nz), Ministry of Education (education.govt.nz), MBIE Tenancy Services (tenancy.govt.nz), Sorted (sorted.org.nz), bank websites. This is financial information, not financial advice.
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This is educational content, not financial advice.