Student loan deduction

Income contingent Student Loans are recoverable through payroll for loans taken out after August 1998. Plan 2 loans were introduced from September 2012, the original type of student loan is referred to as Plan 1.

Only the following documents are valid authorisations to commence or cease student loan deductions:

  • Form SL1 – Start notice issued by HMRC
  • Form SL2 – Stop notice issued by HMRC
  • Form P45 – if box 5 has been ticked

Starter checklist – if indicated by answers to the Student Loan questions

Current deductions rates for 2016/17 are as follows: –

Rate / threshold 2016 to 2017 rate
Employee earnings threshold for Plan 1 £17,495 per year
£1,457 per month
£336 per week
Employee earnings threshold for Plan 2 £21,000 per year
£1,750 per month
£403 per week
Student loan deductions  9%

 

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