Deductions from salaries and wages: Student loan repayment deductions

Deducting student loan repayments

If your employee has a student loan they should be using a tax code that includes the "SL" repayment 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%.

Find out about primary tax codes
Find out about secondary tax codes

You may also be asked to make extra deductions, either by your employee or by us.

Find out about extra deductions

Note
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 go to Work it out to use the PAYE/KiwiSaver deductions calculator and 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.

Find out how to calculate compulsory extra deductions (requested by us)

Find out more

See Student loans for more information about student loan repayments.

 

Date published: 28 Mar 2013

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