Education loan and postgraduate loan repayment guidance for companies

Arrange and loan types and thresholds

With impact from April 2020, the thresholds to make education loan deductions are:

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

Arrange 2 – £26,575 annually (£2,214.58 a month or £511.05 per week)

Workers repay 9% of this quantity they earn throughout the limit for Plan 1 and 2.

Workers repay 6% for the amount they make throughout the limit for PGL .

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

Your employee’s that are new programs deductions should continue – ask your worker to verify their plan and loan kind

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

the new worker fills in a beginner list showing they usually have a student loan – the list should tell you which plan type and loan kind to make use of, in case the worker has both plan kind 1 and 2, inquire further to check on utilizing the student loan business for the correct plan type to take deductions under otherwise, standard to plan kind 1 unless you get a student-based loan start notice SL1 that HMRC supplies you with

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

HMRC delivers you form PGL1 ‘Start Notice’ – this may let you know they usually have a PGL

you obtain a Generic Notification Service education loan and, or PGL reminder – ask your worker to ensure their plan and loan kind

If you’re running ‘Off Payroll’, proceed with the guidance Off-payroll working.

If the worker will not know which plan or loan type they’re on, question them to visit Repaying your education loan. Until you receive further instructions from HMRC if they’re still unable to confirm their plan or loan payday loans OH type, start making deductions using Plan type 1. Defaulting to Arrange 1 is just designed for Arrange 1 or Arrange 2 loans.

If for example the employee believes they usually have overpaid their deductions they ought to contact Student Loan Company (SLC ) – repayment enquiries.

In the event that you get an employee’s P45 when they have begun be effective for you, as well as failed to inform you, or suggest on the starter information they certainly were a student-based loan debtor, or there clearly was a space since their final employment, you ought to inquire further to verify their plan or loan kind.

You really need to begin making deductions through the next payday.

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

Usually do not make any deductions in arrears.

Where a unique employee fills within an expat beginner checklist or shows in the starter declaration list which specifies education loan and PGL deductions apply, you need to begin making these deductions through the payday that is next.

You really need to only utilize an expat beginner checklist where workers have now been seconded to function in britain while remaining employed by an employer that is overseas. Find additional information into the 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 just a reminder to begin deductions where:

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

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

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

You will get these reminders as GNS messages to your internet PAYE account. HMRC suggests you to make sure the correct deductions begin that you register for email alerts for these reminders and may contact.