Changes to SLCIR Deductions (Payroll New Zealand Only)

Description

Changes have been made to how Student Loan Commissioner Installment Rate (SLCIR) deductions are calculated at the Tax pay batch stage for payees who have a student loan debt and are subject to additional SLCIR deductions.

Previously, the SLCIR deduction amount was calculated at the Tax pay batch stage by multiplying the SLCIR rate, as defined in the PAYE Tax Details on the Payee record, by the student loan deduction amount. Now SLCIR deductions are calculated using the following formula if the payee has a main income student loan tax code (M SL or ME SL):

(<pay period gross earnings> - <pay period student loan repayment threshold>) x <SLCIR rate>

Where:

<pay period gross earnings> are the payee’s taxable earnings for the period being paid

<student loan repayment threshold> is the pay period earnings threshold amount at which student loan repayments begin to be calculated

<SLCIR rate> is the payee-specific SLCIR deduction rate, as defined on the Payee record.

If the payee has a secondary income student loan tax code (S SL, SB SL SH SL, ST SL, SA SL) then the SLCIR deduction amount is calculated using the following formula instead:

<pay period gross earnings> x <SLCIR rate>

Benefits

This enhancement makes the SLCIR deduction calculation method compliant with the latest IRD requirement for calculation of additional, compulsory student loan deduction amounts.

Configuration

No configuration required.