High nitrogen (N) leaching from irrigated agricultural soils is the result of N input exceeding soil N load capacity (NLC). A simple approach was developed in this research to assess the NLC of paddy soils in the southern Taihu Lake watershed. Paddy soils were classified into four types (Submergenic, Illuvium, Gleyed, and Percogenic) and 28 soil samples representing all four types were collected from across the region. The NLC values of the paddy soils were assessed using a split-line model and the spatial variability of the NLC among various rice paddy soils in the region was also evaluated with Kriging analysis. Results showed the NLC of paddy soils were both soil type and background N content related. The critical N sorption values (NLC plus soil N background) of the Gleyed, Illuvium, Submergenic, and Percogenic paddy soil samples varied from 283.1 to 315.6 mg kg−1, 203.0 to 270.2 mg kg−1, 240.6 to 254.4 mg kg−1, and 177.4 to 186.2 mg kg−1, respectively. However, on average the NLC of paddy soils in the region was 80.3 mg kg−1, and the corresponding environmental N load threshold was around 110 kg N ha−1. Geo-statistic results showed that the NLCs were unevenly distributed throughout the rice paddy dominated areas of the southern Taihu Lake watershed. The NLC assessment approach and spatial distribution information provided helpful guidance to set an environmental N threshold for best N management and hence reduce degradation of water for the whole rice ecosystem.