Changing from self-employed to salary or wage status
| Responsibility | Description | Find out more... |
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When you stop receiving income with no student loan repayments deducted for example, from self-employed income, or rental income. | ||
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Borrower |
You'll need to:
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Inland Revenue |
Once we've processed your application (within 15 working days), we'll send you a statement with your final interim repayment amounts and dates. |
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Borrower |
You'll need to make the repayments shown on your statement. Once you've paid these, you won't need to make any further interim repayments (provided you use the correct tax code). |
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After the end of the tax year (31 March) | ||
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Borrower |
You'll need to complete your Individual tax return (IR3) for tax purposes. |
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Inland Revenue |
We'll work out whether you've paid the right amount of repayments based on your IR3 return. We'll then send you an end-of-year repayment calculation that'll let you know if you're due a refund, or if you've underpaid your repayments. |
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Special situations
If you're self-employed and that income is less than $10,000 (not including income from your salary or wage) you can estimate your income to nil. This means that you won't have to make any further interim repayments for the year. However, at the end of the tax year, if your combined income (self-employed plus salary or wage) exceeds the repayment threshold, you'll have a bill to pay.
Example
Judy's self-employed and has been working as a freelance journalist. She's recently decided to stop being self-employed, and to accept a job writing for a magazine, earning a salary. She estimates that she's received $11,000 of income from her self-employment and will earn $23,500 from her job at the magazine.
As her new job will be over the repayment threshold, Judy uses the M SL tax code, so her employer will deduct student loan repayments from her salary. Judy uses the PAYE/KiwiSaver calculator, and finds out that her estimated repayment deductions from her salary will be $535.20 (for the 2009 tax year). Because her new employer will be making student loan deductions for her, she won't need to pay as much for her interim repayments and needs to complete a Student loan interim repayment estimation (SL3E) form.
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Estimated total income |
$34,500 |
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Less repayment threshold |
$18,148 |
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Estimated income over the threshold |
$16,352 |
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Multiplied by the repayment percentage |
10% |
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Estimated repayment obligation for the year |
$1,635.20 |
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Less repayment deductions |
$535.20 |
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Estimated repayment required |
$1,100 |
Repayment due in three instalments: 28 August 2008 $366, 15 January 2009 $367, 7 May 2009 $367.
Judy sends in her Student loan interim repayment estimation (SL3E) form and receives a statement from us confirming the new payment amounts and dates.
Next steps
Date published: 07 Apr 2008
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