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Student Loan Changes, Deduction Codes & ESCT

Student Loan Changes, Deduction Codes & ESCT Calculation | Your Payroll NZ

ESCT (Employer Superannuation Contribution Tax) Rate 


The ESCT (Employer Superannuation Contribution Tax) rate needs to be set based on the sum of your employee’s annual gross earnings plus annual gross employer contributions.


If the employee has already been employed for a full tax year, the calculation should be based off the last year’s actual earnings plus last year’s gross employer contributions.


If the employee is new or was previously not employed for the full tax year, then the rate needs to be estimated based on the annual gross earnings and gross employer contributions.



ESCT Rate Threshold (NZ$)

Tax Rate (%)

0 to 16,800 0.105
16,801 to 57,600 0.175
57,601 to 84,000 0.300
84,001 upwards 0.330


New Student Loan Changes

The 2012-13 financial year introduced changes to the student loan regime. Regardless of an employee’s earnings threshold, all borrowers are obligated to use a Student Loan (SL) tax code. Therefore, some employees may need to present you with a new declaration and you can simply change their tax code in the Employee Tax Code Declaration screen as shown below.



New Student Loan Deduction Codes
NZ’s Inland Revenue Department had also introduced new student loan deduction tax codes SLCIR and SLBOR.


 SLCIR is for compulsory deductions required by the IRD.

 SLBOR is for voluntary additional deductions made by the employee.


These are set up in the Employee Tax Code Declaration tab. It is important to use these codes so that the information is correctly reported to the IRD, thereby allowing IRD to accurately adjust these deductions to the employee’s student loan balance.


Recommended Reading:

Your Complete Guide To Inland Revenue's Tax Codes


About The Author ⬎

Your Payroll Team

Our team is fully accredited with the IRD and have years of experience in both payroll accounting practices and Inland Revenue taxes. They are also affiliated with a few of our business partners and can relate to clients and customers alike on all issues.


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