Deductions from salaries and wages: Student loan repayment deductions
If your employee has a student loan they should be using a tax code that has "SL" as the last two letters of the code.
If the tax code is for their primary (main) job, you'll need to make student loan deductions at the standard deduction rate of 12% for each dollar of their gross income over the pay period repayment threshold.
If the tax code is for secondary earnings, then you'll need to make deductions from all of their secondary income at the rate of 12%.
You may also be asked to make extra deductions, either by your employee or by us.
Getting it right
Deduct student loan repayments from your employees' pay after deducting PAYE and child support.
If we find that your employee is using the wrong tax and/or student loan repayment code, we'll write to you asking you to change it. We'll tell you which employees are using incorrect tax codes and let you know which code they should be on.
How do I find out the amount to deduct?
Based on your employee's tax code, the PAYE deduction tables show you the amount to deduct for:
- PAYE, and
- student loan repayments.
How do I work it out?
You can use the PAYE/KiwiSaver deductions calculator to calculate tax deductions from an employee's gross wages, this includes student loan deductions.
If your employee has asked you to make extra deductions for their student loan, they'll let you know how much they want deducted each pay period.
Date published: 23 Oct 2013
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