Student Loan Information

Plan and loan types and thresholds:

With effect from April 2024, the thresholds for making student loan deductions are:

• Plan 1 — £24,990 annually (£2,082.50 a month or £480.57 a week)
• Plan 2 — £27,295 annually (£2,274.58 a month or £524.90 a week)
• Plan 4 — £31,395 annually (£2,616.25 a month or £603.75 a week)

Employees repay 9% of the amount they earn over the threshold for Plan 1, 2 and 4.

Postgraduate loans — £21,000 annually (£1,750 a month or £403.84 a week).

Employees repay 6% of the amount they earn over the threshold for postgraduate loan.

Starting student loan and postgraduate loan deductions — checking plan and loan type

You should work out the correct figure of employee earnings on which student loan and postgraduate loan deductions are due. Use the same gross pay amount that you would use to work out your employer’s secondary Class 1 National Insurance contributions.

Your employee may be liable to repay a postgraduate loan at the same time as a student loan (Plan 1 or Plan 2 or Plan 4). Start making student loan or postgraduate loan deductions, or both, from the next available payday using the correct plan or loan type or both.

You will need to include these on your Full Payment Submission (FPS) if any of the following apply:

• your new employee’s P45 shows deductions should continue — ask your employee to confirm their plan or loan type, or both
• your new employee tells you they’re repaying a student loan — ask your employee to confirm their plan or loan type, or both
• your new employee fills in a starter checklist showing they have a student loan and or postgraduate loan — the checklist should tell you which plan or loan type, or both to use
• HMRC sends you a SL1 start notice — this will tell you which plan type to use
• HMRC sends you a PGL1 start notice — this will tell you they have a postgraduate loan
• you receive a generic notification service (GNS) student loan or postgraduate loan, or both, reminder — ask your employee to confirm their plan or loan type, or both

If your employee does not know which plan or loan they’re on, ask them to check which repayment plan they are on. If they cannot tell you, use Plan 1 in your payroll software until you get a student loan start notice (SL1). Defaulting to Plan 1 is only available for Plan 1, Plan 2 or Plan 4 loans.

Employee has more than one plan type

When the employee is on more than one plan, start deductions for the plan with the lowest recovery threshold until you get a SL1. Check the student loan recovery thresholds.

Off-payroll working

If you’re operating off-payroll you are not responsible for deducting student or postgraduate loan repayments for workers engaged through their own companies. The worker will account for student loan obligations in their own tax return.

Find out more about deemed employer responsibilities under off-payroll working rules.

SL1 or PGL1 start notice received

If you receive a SL1 or PGL1 start notice for someone:

• you have never employed, contact the Employer helpline, HMRC will investigate and contact you again if necessary, file away the SL1 or PGL1 start notice
• who claims never to have had a student loan, start making deductions in line with the start notice and continue doing so unless HMRC tells you otherwise, then file away the SL1 or PGL1 start notice
• for whom you’re already making deductions you should:check the plan type on the SL1 start notice you have just received
  update your payroll software and start making deductions using the new plan type at the next available pay day if this is different to the one you are currently using
  check the details on the PGL1 and update your payroll software if needed
  

Your employee should ask for a refund if they think they have overpaid their loan.

If you receive an employee’s P45 after they have started to work for you, ask them to confirm their plan or loan type if:

• they did not tell you, or indicate on their starter information they were a student loan borrower
• there is a gap since their last employment

You should start making deductions from the next payday.

If your employee does not know their plan or loan type they should check which repayment plan they are on to find out.

Do not make any deductions in arrears.

Employees seconded to work in the UK by an overseas employer

Employees seconded to work in the UK by an overseas employer should fill in a starter checklist. If they say that they have a student loan or postgraduate loan, or both, you should to start making these deductions from the next payday.

Find more information in the PAYE and National Insurance contributions guidance.