When you set up student loans for an employee, they can have more than 1 student loan to repay. HMRC advises to deduct 1 student loan through your payroll software.

Unless otherwise instructed by HMRC, set the employee up with the student loan plan type with the lower repayment thresholds.

NOTE: For further questions or clarification around which student loan type to use, speak to HMRC.

Multiple student loans

Identify which student loan has the lower repayment thresholds, and set that student loan up in Sage 50 Payroll.

 EXAMPLE: A monthly employee has both a Plan type 1 and Plan type 2 student loan.

• The repayment threshold for Plan type 1 in the 24/25 tax year is £2,082.50 per month
• The repayment threshold for Plan type 2 in the 24/25 tax year is £2,274.58 per month

Set up the employee with a Plan type 1 student loan, to ensure that repayments start at the correct point. 

This ensures the student loan repayments deduct at the earliest point, and HMRC allocate any repayments to the relevant loans.