Important information for employers when using the 2010 PAYE tables (Payroll News)

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Payroll News - 2009

Important information for employers when using the 2010 PAYE tables

This explains how to use the 2010 PAYE tables to record the PAYE and student loan repayments for employees who've elected the new ME SL tax code for the independent earner tax credit (IETC). If you pay people with student loans you need to read this.

ME SL and the PAYE tables

In the PAYE tables (IR340 and IR341) for 2010 we've included two new columns for the ME and ME SL tax codes which apply from 1 April 2009. These columns allow you to work out the appropriate payments for employees eligible to receive the independent earner tax credit (IETC).

Transferring ME and ME SL deductions to your Employer monthly schedule (IR348)

The 2010 PAYE tables show the ME SL column as a combined total for PAYE and student loan (SL) repayments.

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The employer monthly schedule (EMS) however, requires you to separate the PAYE and student loan repayments for each employee.

For each pay period

When transferring the PAYE and student loan repayments for an employee using the ME SL tax code to your EMS, you'll need to:

(a) use the PAYE figures from the ME column, and

(b) the student loan deduction figures from the "M SL Loan ded" column.

And then transfer these amounts to the appropriate columns for that employee on your EMS.

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Important

You shouldn't transfer the total shown in the ME SL column to your EMS. Instead ensure that you record the appropriate PAYE and student loan repayments for each employee using that tax code.

You can double check if you've transferred the correct amounts to your EMS by adding the two figures together to get the amount shown in the corresponding ME SL column.

For example: $173.06 $51.80 $224.86 = (ME PAYE) + (M SL loan repayment) (ME SL)

Example

If your employee is using the ME SL tax code and has gross weekly earnings of $521.00. When transferring the PAYE and student loan repayments to your EMS, you'll need to do the following, using the 2010 tables:

Use the corresponding PAYE figure from the ME column - which is $85.38
Use the corresponding student loan repayment figure from the "Loan ded" column - which is $15.40

When totaled, these figures will equal the amount showing in the corresponding ME SL column. In this case that's $100.78 ($85.38 + $15.40).

Online PAYE calculators

You can also use the online PAYE calculators to help you work out an employee's PAYE and student loan repayments if they use the ME SL tax code. You can find the calculators under "Work it out".