TAX CODE — SLBOR

What is SLBOR?

If you have employees with a student loan then you most possibly have come across a letter from Inland Revenue about student loan repayment rate.

Letter sample:

IRD Additional Student Loan Deductions SLCIR

^{⇨ The Compulsory Extra Deduction Rate given on the notice (41.67% in the above example) is relative to the standard student loan repayment rate, not relative to the employee's full wage.}

How To Calculate The Rate For Your Payroll

To calculate the rate to be entered into Your Payroll, multiply the compulsory extra deduction rate as provided on the IRD letter by the standard student loan repayment rate.

If the standard student loan repayment rate from 1^st April 2013 is 12%, so the calculation is as follows:

If the Compulsory extra deduction rate on the letter is 41.67%, multiply this by 12%, i.e,

41.67% ╳ 12% = 5

Remember

The only major difference between SLBOR & SLCIR is that, while SLCIR is compulsory from IRD, SLBOR is entirely voluntary.
Some employees may want to make extra deductions off their student loan to help pay it faster.
The same employee can also stop the voluntary extra deductions at any time. No authorisation is required from IRD.
Simply enter the total amount of extra deductions employee wants to make for the respective month in the student loan deduction box.
DO NOT enter any start or finish dates, gross earnings, PAYE, child support, KiwiSaver, employer contributions or other student loan deductions.