Education loan and postgraduate loan repayment guidance for employers

Arrange and loan kinds and thresholds

With effect from April 2020, the thresholds in making student loan deductions are:

  • Arrange 1 – ВЈ19,390 annually (ВЈ1,615.83 an or ВЈ372.88 a week month)
  • Plan 2 – ВЈ26,575 annually (ВЈ2,214.58 a thirty days or ВЈ511.05 per week)

    • Employees repay 9% for the quantity they make on the limit for Arrange 1 and 2.

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

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

  • Your employee’s that are new shows 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 checklist showing they usually have a student loan – the checklist should inform you which plan type and loan kind to make use of, should your employee has both plan kind 1 and 2, inquire further to test aided by the education loan company for the plan that is correct to just take deductions under otherwise, default to plan kind 1 before you get an educatonal loan start notice SL1 that HMRC supplies you with
  • HMRC delivers SL1‘Start is formed by you Notice’ – this will say to you which plan kind to make use of
  • HMRC delivers you form PGL1 ‘Start Notice’ – this may inform you they’ve a PGL
  • you obtain a Generic Notification Service education loan and, or PGL reminder – ask your worker to confirm their plan and loan kind

    • If you’re running ‘Off Payroll’, stick to the guidance Off-payroll working.

    In the event your worker will not understand 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 type, start making deductions using Plan type 1. Defaulting to Arrange 1 is just designed for Arrange 1 or Arrange 2 loans.

    If the employee thinks they usually have overpaid their deductions they ought to contact Student Loan Company (SLC ) – payment enquiries.

    After they have started to work for you, and they did not tell you, or indicate on their starter information they were a student loan borrower, or there is a gap since their last employment, you should ask them to confirm their plan or loan type if you receive an employee’s P45.

    You need to start making deductions through the payday that is next.

    If the employee will not understand their plan or loan type they need to head to Repaying your education loan.

    Usually do not make any deductions in arrears.

    Where a fresh worker fills in a expat starter checklist or indicates regarding the beginner declaration list which specifies education loan and PGL deductions use, you really need to begin making these deductions from the payday that is next.

    You need to just utilize an expat starter checklist where employees have already been seconded to exert effort in britain while remaining employed by the employer that is overseas. Find additional information in the help guide to PAYE and National Insurance efforts.

    Generic Notification Service (GNS ) messages

    HMRC will send 4 forms of student loan or loan that is postgraduate reminders.

    One is just a reminder to start out deductions where:

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

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

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

    You shall receive these reminders as GNS communications to your web PAYE account. HMRC advises that you sign up for email alerts of these reminders and will contact one to ensure that the correct deductions start.