All employees must complete a tax code declaration. Contractors receiving schedular payments must complete a tax rate notification.
Employees receiving salary or wages must complete a Tax code declaration (IR330) form when they start working and give this to their employer. Contractors receiving schedular payments must complete a Tax rate notification for contractors (IR330C) form when they start a contract and give this to their payer.
Employers must use the no-notification rate to deduct tax for all employees who have not fully completed an IR330 or contractors who have not completed an IR330C or who have not provided a valid IRD number.
Employees with a job that is their main or only source of income must use a main tax code for that job. Only one main tax code can be used at a time.
If an employee has more than one job, any jobs that are not their main income source are known as secondary employment. The employee must complete a separate tax code declaration form for each secondary job using a different tax code to their main employment.
Some employees will have a special tax code certificate. This tells the employer what tax deductions to make from their salary or wages. If the employee has a student loan, the special tax code certificate may also include a special deduction rate. Some contractors will have a special tax rate certificate. This tells the payer what tax rate to deduct from the schedular payments.
Employees can request extra deductions to be made from their salary or wages so they can repay their student loan faster. We can also ask you to make compulsory extra deductions, to catch up on an underpayment that has occurred in the employee's student loan. Extra deductions are in addition to the amount that is normally deducted for an employee who uses a "SL" repayment code.
Employees who are studying full-time may give their employer a repayment deduction exemption certificate, which means the employer does not need to make student loan deductions from their salary or wages. Employees with repayment deduction exemptions do not need to use "SL" repayment codes.
Some employees may give their employer a special deduction rate certificate which shows a reduced rate to be used for the student loan deductions. This rate replaces the repayment deductions that would normally be required.