Standard and SDR rate
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- Last Updated: Wednesday, 26 February 2025 14:36
Standard Deduction Rate
These are currently at 12% of gross taxable earnings, but maybe lower if an SDR has been requested by the employee and approved in writing by IRD.
In KeyPay a standard deduction is set by simply checking the Enable Student loan option on Page 2 of the employee file. A group-box will appear showing more options and can be accepted as is. The employee Tax Code will then include SL.
Special Deduction Rate
This simply lowers the standard rate from 12% to a value specified by IRD which could be from zero to 11%. An employee who is currently studying, or is in financial difficulty for some reason, can be on a lower rate. They must re-apply to I.R for this each year and notify IRD if their circumstances change.
On the same option screen as above, check the Set an SDR rate box. You can then enter the required rate on the next line - SDR % rate 1-11% and confirm the specified expiry date which defaults to the end of the current tax year.