The electronic structure of nitrogen vacancies in gadolinium nitride are studied using the full-potential linearized muffin-tin orbital method in the local spin density approximation with Hubbard U corrections (LSDA+U). The vacancy is found to have two localized defect levels in the gap, one of each spin. The third electron of each vacancy in the neutral state dopes the conduction band. The single positive state is found to be the ground state for Fermi levels located anywhere within the band gap. The vacancy has a net magnetic moment of 1 μB in the neutral charge state. The presence of the vacancy is found to increase the average exchange interactions between Gd atoms and hence the Curie temperature but only by about a factor 2 compared to GdN without vacancies.