Do you think your student loan deductions on your secondary income are too high? Then check out if you qualify for a special deduction rate. You need to meet the following criteria:
- Your total income from your main job is less than the pay period repayment threshold (eg, $367 per week), and
- Your secondary tax code is SB SL or S SL.
You can apply now for a special deduction rate through Inland Revenue’s secure online services – you need to be registered for the service. Once you have completed your application, you can download a certificate which must be given to your employer so this will apply to your pay from 1 April 2012.
The reduced rate is valid for a period of up to 3 months at a time. You’ll need to reapply each quarter you meet the qualifying criteria if you want to continue having a special deduction rate.
If you don’t apply for a special deduction rate, your repayments from your secondary job will be deducted at the standard secondary rate of 10% of your gross pay. Having a special deduction rate will mean having reduced student loan deductions on your income from your second job – making sure you’re making the right repayments every pay period.
There are other changes to student loans from 1 April 2012. To find out about these and to apply for the special deduction rate, go to www.ird.govt.nz/studentloans