Finance Calculator for Payroll Deductions


You can finance the purchase of service credit through payroll deduction if your employer offers this option. If you are interested, check with your employer to see if they offer payroll deductions and the tax basis for the deductions. Once you sign up for tax-deferred payments, you cannot change the payment method.

The amount to finance the purchase of service credit or redeposit depends on how much service credit you want to purchase, your contract basis (10, 11 and 12 month contract base) and the interest charged for the finance.

The interest charged for the finance is set at a rate established annually by the Teachers’ Retirement Board. The interest rate for fiscal year 2004-2005 is 4.5 percent, and your estimate using this calculator uses that rate. If you finance a purchase during this fiscal year, you will be charged the 4.5 percent rate. That rate will be locked in for the life of your finance period. Additionally, if you are already financing a purchase or redeposit, you cannot refinance your purchase or redeposit.

Before using the finance calculator for payroll deductions calculator, please read this disclaimer.

How to Start a Purchase

If you would like to finance a service credit purchase by payroll deduction, use the CalSTRS form called Redeposit or Purchase of Permissive or Nonqualified Service Credit. After you send the completed form to CalSTRS and CalSTRS verifies your eligibility for the purchase, you will receive a billing statement listing the amount due and the cost to finance. If you agree to the terms of the billing, sign the billing statement and send it to your employer within 35 days of the date on the original billing invoice. If you want to change the initial payment terms of your deductions, contact CalSTRS. Please do not send money to CalSTRS.