Repayment Exemption Certificate Process

Employees may be eligible for a student loan repayment exemption.

Further Reading: See http://www.ird.govt.nz/studentloans/payments/compulsory/salary-wage/repay-exemp/sl-repay-exemp.html

The IRD provides eligible employees with a repayment exemption certificate that advises the employer not to deduct student loan repayments. This certificate is valid for a maximum of one tax year (1 April - 31 March) at a time. It covers the time between semesters, including the Christmas break, as long as the employee is continuing their study programme in the next semester. If the employee is going to continue study in the next tax year, they need to reapply for the exemption.

Exempt employees do not have to use a student loan (SL) tax code, and they do not need to make student loan repayments.

In this example, the IRD issued Peter van der Loo with a repayment exemption certificate so he does not have to make standard student loan repayments for the first quarter of the 2013-2014 tax year.

Peter's record contains the following values:

The repayment exemption certificate contains the following values:

1. Before you process and close Peter's pay for 01/04/2013, enter the following value on his Tax tab:

   Field	Values
   Tax code	M

2. Attach a scanned copy of the repayment exemption certificate to Peter's Documents tab.
3. Outside Exolvo, record the end date of the certificate because you will need to resume Peter's student loan repayments from this date. In this example, you would change Peter's Tax code back to "M SL" on 01/07/2013.

Topic: 18129