Student loan amount not being calculated (New Zealand)
By buying this paper, you're helping to Employees who have undertaken tertiary education have to pay back the Student Loan they took out to help pay for the tuition. In these cases the employee would be taxed using a tax code containing the SL suffix, e.g. M SL or S SL.
The tax codes containing the SL suffix determine the Student Loan value for the pay being processed, based on the IRD specification. In some instances the Student Loan amount shows as $0.
When the Student Loan amount is showing as $0 the following can assist with determining why this is happening:
The employee's weekly earnings are insufficient to cross the threshold
Each year the IRD advise what the Student Loan Repayment Threshold is for that Financial Year. When a pay is processed, the Student Loan Repayment Threshold amount is determined for that pay period and the amount of the pay period is then compared to the Threshold figure. If the pay period amount is less than the Threshold figure then no Student Loan is deducted.
The student loan rate has been set to 0 or left blank
When the pay period amount is greater than the Student Loan Repayment Threshold for that pay period, Student Loan is normally calculated at 12% of each dollar of the pay above the Threshold. In some cases, IRD may allow a person to pay back their Student Loan at a different rate.
In the Employee Details tab of Employee Maintenance there is a Student Loan Rate field that will default to 12% (the basic rate for Student Loan repayments) but this field is editable for those situations where a different rate is specified by IRD. Because this field is editable, the rate could be accidentally changed to 0% (the field will be blank).
When there should be an amount of Student Loan calculated in a pay period due to the pay amount being over the Threshold, correct the rate in the Student Loan Rate field in the Employee Maintenance screen to what the rate should be.
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.