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STC - Special Tax Codes

Special Tax Codes are approved by the IRD to reduce either student loan deductions and/or PAYE tax rates for a specific time period. 

Updated: July 2026

You may receive a letter/notice from the IRD or a certificate from your employee to use a special deduction rate. This notice/certificate will be for a non-standard deduction and could be for (examples only, not an exhausted list):

  • deducting the student loan repayments at a rate lower than usual,
  • deduct no student loan repayments at all,
  • deducting PAYE at a special rate,
  • to deduct PAYE at all

The notice or certificate can contain both a special tax code and a reduced student loan deduction rate. 

NOTE: This is different to the standard notice to start making student loan deductions at the usual rate. 

Info - Blue Block (1)STC, or Special Tax Code is a tailored PAYE tax rate to suit an individuals circumstances. This tax code is for a specific period, whereafter the certificate must be renewed or an IR330 declaration be submitted.

How do I set this up?

As this is a tax code, the update is done to the Employee's Profile.

Where to Change the Tax Code:

In the employee's profile select 'Standard Pay' from the tab menu. 

Changing the Tax Code:

 

  1. In the tax code select 'STC' from the dropdown menu.

 

  1. In the next box, select the tax code option that applies based on the letter/certificate. 
  2. Fill in the percentage that is indicated on the letter from IRD or the certificate.
     
    1. If the deduction is to be Zero, fill in 0.00
    2. If the STC code applies to both student loan repayments and PAYE, you will see boxes for both as in the example below.
      STC_Both PAYE and StudenLoan
  3. NOTE When you save the new setting that the Tax Code will not stay STC, but show whatever the original tax code was. In this example, the employee was on M SL.This is correct.

  4. Scroll down to the bottom of the page and click 'Save' to update this setting.
    Dont forget to save

This employee's tax code has now been updated.

Info - Blue Block (1)Set yourself a reminder to update your employee's tax code on the end date specified in the letter from IRD, or on the certificate. 

Info - Blue Block (1)If you need to update the tax code in the middle of a pay period, follow this link to our help article full of useful tips.

What will I see on the Timesheet?

When you update employee settings, an open timesheet on the dashboard will display the pay type 'Standard Pay (-1)' to show entries that were added before the updated setting. This pay type will not display in new timesheets created after updating employee settings.

STC Student loan Timesheet

  1. The PAYE tax code will display the base code, not STC. The special rate will be applied, so if you entered the rate as 0.00 the amount will be $0 on the timesheet.
  2. The student loan repayments will be calculated at the STC rate, if entered.
    1. If the student loan rate was set to 0.00, 'student loan' will not appear in the timesheet calculations or on the payslip.

Info - Blue Block (1)For more information on using STC codes, follow this link to the IRD website.

That is it! You have now added STC rates to your employee's tax calculations, easy as pie!