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Sometimes the right repayments are not deducted from your salary or wages, and you do not pay enough. When this happens we call it a significant under-deduction.

You might not have made enough repayments if either:

  • your employer has not deducted the right amount
  • you did not use the 'SL' tax code for your job.

Use our 'PAYE deductions from salary or wages calculator' to check if you’ve had the right amount deducted from your income.

If your deductions are less than they should be, talk to your employer. Check you're using the right tax code. If you need to change your tax code, give your employer a new Tax code declaration - IR330. Make sure you include the 'SL'.

About tax codes 

Catching up on payments

We'll let you know if there is a significant under-deduction, and get you to pay the missing amount through your salary or wage by sending your employer a 'Student loan extra deduction notice'.

The amount of your student loan extra deduction depends on your tax code. If your tax code with that employer is a:

  • main tax code (M SL or ME SL), your extra deduction will be 5% of every dollar you earn over the pay period repayment threshold
  • secondary tax code (such as S SL or SH SL), your extra deduction will be 5% of every dollar you earn.

For example, if you earn $600 a week before tax, your extra deduction will be $6.80

$600 (weekly pay before tax) − $464 (weekly repayment threshold) = $136.
$136 (income over the repayment threshold) × 5% (extra deduction rate) = $6.80.

 
5 minutes
PAYE deductions from salary or wages calculator

Employers and employees can work out how much PAYE should be withheld from wages.

Go to this tool
Last updated: 03 Apr 2024
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