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Removing an IRD Debt Deduction from an Employee Account

How to remove a deduction if IRD advises you to stop. 

Updated: May 2026

If you receive a letter or notice from IRD advising you to stop making deductions for a debt from an employee here is how to remove it.

Info - Blue Block (1)The deductions will run automatically until the amount has been settled, or you update the system to stop this deduction.


Below is an example of a letter from IRD advising the employer to stop making deductions:

IRD STOP Deduction Notice

Information to Note:

  • Only stop deductions for IRD debt if advised by the IRD. Do not stop on an employee's request
  • The balance will not be provided in the letter. 

Removing the IRD Debt Deduction from the Timesheet

For the system to update the employee record the stop order needs to be loaded into an active timesheet with a standard pay row. Let's look at the options for doing this:

  • If the timesheet  you have entered the debt in the IRD (+) row has been processed, you need to add this stop order to the employee's next timesheet.
  • If you already have an active pay on your dashboard with an open timesheet for this employee, you can use this and add the entry to their timesheet.

Pro Tip - Blue BlockPro Tip: Sometimes the IRD letter to stop debt deductions comes soon after the order to start a deduction and before a pay has been processed.

If the original timesheet you entered the IRD (+) line on is still on your dashboard, simply open this timesheet and delete the IRD (+) line. Update and Save the timesheet. 

 

This example will show you how to remove an IRD debt deduction after it has been processed and activated. Follow the steps below to get all the information you need to remove this deduction.

Info - Blue Block (1)By entering this stop order, the deductions in the employee's timesheet will be removed. 

IRD Debt Stopped (1)

  1. In the employee timesheet, make sure that there are saved entries for 'Standard Pay'. This is needed to generate the 'Pay Summary' with the correct 'IRD debt line' (2).
  2. Add the amounts in the IRD debt line together (a) + (b) to get the current balance owing.
  3. Add a row to the timesheet by clicking on the green + sign.
  4. Select IRD debt (+) as the entry type.
  5. Enter the balance as calculated in step 2 as a negative amount in any box. 
  6. Update and Save the timesheet.
  7. The IRD debt line (2) in the Pay Summary will now have disappeared. Leave this row in the timesheet. when it processes the IRD Debt amount will be removed from the employee record. 
    Balance Entry IRD Debt
    Please do not remove this line from the timesheet.

Info - Blue Block (1)Please Note: This entry has to be a negative amount to cancel the balance.

You have successfully updated the employee record to delete the IRD debt from their payroll account.

What if the IRD debt line stays in the Pay Summary?

If the IRD debt line remains in the Pay summary with a balance, the system was not updated correctly. The negative amount may be incorrect. Please contact our Customer Success Team should you require assistance.