Standard Calculation

Michael’s student loan deduction depends on his gross income in the current pay. Pay processing used the following steps to calculate Michael’s student loan deduction value.

1. Calculate Michael’s current gross pay:

   Include all taxable allowances.

   Exclude non-taxable allowances and extra payments.

   Note: If no special tax code exists for extra payments, the student loan deduction is 12% of the extra payment amount.

   Round down to dollar amount.

2. Calculate student loan repayment threshold per pay period.

   Note: Inland Revenue sets the student loan repayment threshold.

   The student loan repayment threshold for 2013-2014 is $19,084.00:

   19,084 / 52 weekly pays per year = 367.00

   Round down to three decimal places.

3. If Michael’s gross pay is greater than the student loan repayment threshold, then calculate Michael’s student loan repayment for this pay period:

   Gross pay	–	SL repayment threshold per week	*	12%	=	SL repayment
   2019		367.000				198.24

Topic: 18127