Adding an SLCIR deduction (New Zealand)
For employees that have a student loan the IRD has stated that they use a tax code with the suffix of SL, ie: M SL, S SL, etc. With the 1st April 2012 changes the IRD bought in two additional loan repayment types for employees with a student loan: SLBOR for voluntary loan repayments and SLCIR for repayments required by the Commissioner of Inland Revenue.
Before creating an SLCIR deduction
IRD will have sent a letter advising of the percentage figure to be deducted which is calculated from the standard student loan rate.
Prior to 1 April 2013 the percentage rate mentioned on the IRD letter is that percentage of the standard student loan rate at that time, i.e. the 50% rate mentioned on the letter is 50% of the standard 10% student loan rate so should be entered as 5% in the field in the software.
After 1 April 2013, the percentage rate mentioned on the IRD letter is related to the standard student loan rate of 12% that took effect on that date, i.e. the 41.67% rate mentioned on the letter equates to 41.67% of the 12% student loan rate and so 5% is the figure to be entered in the field in the software.
To determine the percentage to enter in the "Rate of additional deduction" field, the following calculation can be used:
"Standard Student Loan Rate %" x "Percentage specified in IRD letter" equals rate to enter
i.e. 12 x 41.67% = 5
- Go to the Employee Details tab of Employee Maintenance.
- Select the SLCIR checkbox on the Employee Details tab of Employee Maintenance then tick the Apply SLCIR box in the window that appears.
In the Rate of additional deduction field, enter in the rate applicable to the percentage rate which the IRD has asked the amount to be recovered at.
You can figure out what percentage needs to be deducted by reading the "Before creating an SLCIR deduction" section on this page.
- In the Amount of under deduction to recover field, enter in the dollar amount which the IRD have asked to be deducted then click on the Save button
- Saving the settings will generate a warning that the current settings will overwrite any existing SLCIR settings that may be in place. Click on Yes and the settings will be saved.
These settings will add the SLCIR deduction to the employees pay each cycle going forward until the amount to recover has been reached. Once this has been reached the system will remove the SLCIR deduction from the employees pay.
Need more help? You can open the online help by pressing F1 on your keyboard while in your software.
You can also find more help resources on the MYOB Exo Employer Services Education Centre for Australia or New Zealand.