Education loan and postgraduate loan repayment guidance for companies

Arrange and loan kinds and thresholds

With impact from 2020, the thresholds for making student loan deductions are april:

Arrange 1 – £19,390 annually (£1,615.83 a month or £372.88 per week)

Plan 2 – £26,575 annually (£2,214.58 an or £511.05 a week month)

Workers repay 9% of this amount they make on the limit for Arrange 1 and 2.

Workers repay 6% for the amount they make within the threshold for PGL .

Beginning education loan and PGL deductions, checking plan and loan type

your brand-new employee’s P45 programs deductions should continue – ask your worker to verify their plan and loan kind

your employee tells you they’re repaying a student loan – pose a question to your worker to ensure their plan and loan kind

your brand-new employee fills in a beginner list showing they will have a student loan – the checklist should let you know which plan type and loan kind to make use of, in case your employee has both plan kind 1 and 2, inquire further to test because of the education loan business for the proper plan kind to simply simply take deductions under otherwise, standard to prepare kind 1 until such time you receive an educatonal loan start notice SL1 that HMRC provides you with

HMRC delivers you form SL1 ‘Start Notice’ – this will say to you which prepare type to make use of

HMRC sends you form PGL1 ‘Start Notice’ – this may inform you they will have a PGL

You receive a Generic Notification Service student loan and, or PGL reminder – ask your employee to confirm their loan and plan kind

If you’re operating ‘Off Payroll’, follow the guidance Off-payroll working.

In case your employee will not understand which plan or loan type they’re on, question them to attend Repaying your education loan. Until you receive further instructions from HMRC if they’re still unable to confirm their plan or loan type, start making deductions using Plan type 1. Defaulting to Arrange 1 is designed for Arrange 1 or Arrange 2 loans.

In case the employee thinks they will have overpaid their deductions they need to contact Student Loan Company (SLC ) – payment enquiries.

In the event that you get an employee’s P45 once they have begun be effective for you, and so they would not let you know, or suggest on the beginner information they certainly were a student-based loan debtor, or there clearly was a space since their final work, you really need to inquire further to verify their plan or loan kind.

You ought to begin making deductions through the payday that is next.

In case the worker will not understand their plan or loan kind they ought to head to Repaying your education loan.

Usually do not make any deductions in arrears.

Where a brand new worker fills within an expat starter checklist or suggests regarding try the web-site the starter declaration list which specifies education loan and PGL deductions apply, you need to begin making these deductions through the next payday.

You need to just utilize an expat beginner checklist where workers have now been seconded to focus in britain whilst remaining employed by an international manager. Find more info within the help guide to PAYE and National Insurance efforts.

Generic Notification Service (GNS ) messages

HMRC will be sending 4 forms of education loan or loan that is postgraduate reminders.

One is really a reminder to start deductions where:

The second reason is a reminder in order to make deductions utilising the proper plan kind where:

You should ignore any student loan GNS message if you’re paying an occupational pension rather than a salary.

For employments susceptible to the off-payroll working rules from April 2020, just refund the education loan and or PGL deductions extracted from payments susceptible to the off-payroll working guidelines only.

You shall get these reminders as GNS messages to your Online PAYE account. HMRC suggests that you sign up for e-mail alerts of these reminders that can contact you to definitely ensure that the proper deductions start.