PayHero will automatically calculate student loan deductions if an employee has been set-up with a tax code ending in 'SL' such as 'M SL' or 'S SL'. The Student Loan Repayment Pay Item will be added to any applicable employees default pay items and deduct the appropriate amount when they are included in a pay run.
Student Loan deductions will only apply to any earnings over the current Student Loan repayment threshold. You can find out more about the current threshold on the IRD Website.
Additional Student Loan Repayments
The IRD may advise that an employee is required to make compulsory repayments in addition to their standard student loan repayments or an employee may choose to increase their student loan repayment amount of their own accord. There are a couple of Pay Items that can account for this.
Student Loan Voluntary Repayment
If an employee wishes to make an increased repayment towards their student loan, add the 'Student Loan Voluntary Repayment' Pay Item into the employee's Default Pay tab and fill in the Rate field.
Rate - The fixed amount to be deducted on top of their standard contributions each pay.
Student Loan Underpayment Deduction
If you are required by the IRD to make additional student loan repayments for an employee due to an underpayment that has occurred, the 'Student Loan Underpayment Deduction' Pay Item can be used.
Extra Deduction Rate - The extra percentage of regular student loan repayments to be deducted each pay. Typically this will be 41.67%.
Current Balance - The total amount that has been underpaid as stated by the IRD.