Borrower Payments or BOR
- Details
- Last Updated: Wednesday, 26 February 2025 14:34
Borrower Payments.
These are completely optional extra deductions that the employee wishes to make and require no approval by IRD. They are completely independent from all other student loan deductions and are shown separately on the EI return.
All other repayments are subject to an earnings threshold, currently $464 per week for employees on the M codes. The standard 12% is deducted from Gross taxable earnings minus the current threshold. For secondary codes the % rate applies on total Gross earnings - no threshold.
The BOR % rate always applies to total Gross Earnings, (no threshold) regardless of other rates.
On the KeyPay employee group-box for SL the last line allows entry of the BOR. It can be a % rate from 1 to 25 - entered as 0.10 to 0.25. Above this - from 0.26 to 999.99 represents a fixed $ amount. Thus an employee could decide that he/she could afford to always repay say $10 each payday, rather than a percentage. Conversely, $10 might be too much when earnings are frequently low and a percentage might make more sense. Its also possible that an employee who knows they are in arrears could avoid higher compulsory deductions if IRD observe that an effort is already being made. Either way BOR is the employees choice as they see fit.
Note that from EI filing Ver 2, the previous SLBOR and SLCIR tax codes are invalid as they have their own columns on the EI return.