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The New Zealand government introduced the Student Loan Scheme in 1992. Under the scheme, Inland Revenue is responsible for collecting student loan repayments from the year after the money is borrowed, and administering interest write-offs.
Repayment Types
Standard repayments are made at the legislated rate of 12% of the employee's earnings. If the employee's tax code is M SL, ME SL or STC SLM then the student loan repayment threshold is applied so the employee's first $19,084 (annual) is excluded from the repayment calculation. The threshold is not applied to other tax codes (SB SL, S SL, SH SL, ST SL, and STC SLS) so the repayment is calculated on the employee's whole earnings.
Catch-up repayments are initiated by the student loan commissioner, and the employee must make these repayments in addition to their standard 12% repayment.
Voluntary repayments are initiated by the employee because they want to make these repayments in addition to their standard 12% repayment.
Note: From 01/04/2013, if the employee makes voluntary repayments of $500 or more in a tax year, they no longer receive a 10% bonus based on their voluntary repayment amount.
These repayment types are reported separately on the EMS (Employer Monthly Schedule).
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Topic: 18119
