To calculate the rate to be entered into Payroll, you need to multiply the Compulsory extra deduction rate (provided on the IRD letter) by the standard student loan repayment rate. The standard student loan repayment rate from 1 April 2013 is 12%, so the calculation is as follows:

If the Compulsory extra deduction rate on the letter is 41.67%, multiply this by 12% (41.67% X 12% = 5).

1. In Payroll, go to the Maintenance command centre and click Maintain Employees.
2. Click Select Employee. The Select an Employee window appears.
3. Click the applicable employee then click OK.
4. Click the Compulsory Deductions tab.
5. In the Additional Student Loan Deductions area:
   
   1. Select the option SLCIR (Commission deduction).
   2. Enter the Deduction in Default amount. This is the Total amount to recover as advised on the IRD letter. In our example this would be $672.20.
   3. Enter the Rate. See above for the calculation to determine this.
      
      
      
      
6. Click Close.

The deduction will now appear on the IR345. The extra deduction will cease automatically once the total amount to recover has been paid.