Special Tax Codes and Student Loans Process

Special tax codes (STC) can only be used to change an employee's income tax deduction rate. If the employee has a student loan and they also need to change their student loan repayments, they can apply for a Special Repayment Rate on secondary income or a repayment exemption. See Repayment Exemption Certificate Process.

Main income earners

Main income earners with student loans who provide you with an IR23BS must continue to repay student loans at the standard rate, unless they provide you with a repayment exemption certificate.

• If an employee provides you with a repayment exemption certificate, set their tax code to "STC"
• If an employee does not provide you with repayment exemption certificate, set their tax code to "STC SLM".

Secondary income earners

Secondary income earners with student loans who provide you with an IR23BS must continue to repay student loans at the standard rate, unless they provide you with a repayment exemption certificate or a special deduction rate certificate.

• If an employee provides you with repayment exemption certificate, set their tax code to "STC".
• If an employee does not provide you with a repayment exemption certificate nor a special deduction rate certificate, set their tax code to "STC SLS".
• If an employee does not provide you with a repayment exemption certificate, but they provide a special deduction rate certificate, set their tax code to "STC SLS" and follow the Special Repayment Rate Process.

  Important: Attach scanned copies of IRD letters and certificates to the employee's Documents tab.

Topic: 37423