Calculation Method "A. Arrears payment"

The "A. Arrears payment" calculation method performs the following steps to derive the deduction rate amount:

1. Get employee's gross pay.
2. Calculate the period adjustment factor:

   Number of periods to tax * Weeks on period (such as 4.3333 for monthly employees)

3. Calculate the threshold for the employee's pay:

   $100 * Period adjustment factor (Step 2)

4. Calculate repayment rate:

   Employee loan default repayment rate * Number of periods to tax

5. If the Gross pay (Step 1) is less than the adjusted threshold (Step 3):

   Deduction rate amount = $10 * Period adjustment factor (Step 2).

   If the gross pay (Step 1) is greater than or equal to the adjusted threshold (Step 3), continue to Step 6.

6. If the repayment rate (Step 4) is less than 20% of the gross pay (Step 1):

   Deduction rate amount = Repayment rate (Step 4)

   If the repayment rate (Step 4) is greater than or equal to 20% of the gross pay (Step 1):

   Deduction rate amount = 20% of gross pay (Step 1)

Topic: 38466