Postgraduate loans provide financial support to UK students pursuing higher education. This is repayable through your payroll. Starting the loan deduction Loan repayment plans Unlike student loans, there’s just one type of postgraduate loan repayment plan. For tax year 2025/26, the repayment thresholds are: | Plan Type | Weekly (£) | Monthly (£) | Annual (£) | Rate (%) | | Postgraduate | 403.84 | 1,750.00 | 21,000.00 | 6.00 | The loan only deducts if the employee’s earnings for NI are over the thresholds above. When to start taking deductions HMRC may notify you in various ways to start making postgraduate loan deductions: - You receive a Start Notice, form PGL1, from HMRC. The start date will be at least six weeks from the date of issue.
- A new employee gives you form P45 and there’s a Y in the Postgraduate Loan deductions box.
- A new employee provides you with a Starter Checklist form. They select Yes to say they have an unpaid graduate loan.
Set up the postgraduate load deduction Before you can assign a postgraduate loan to an employee, you must set up the deduction. Read Create a postgraduate loan deduction.
Stopping the loan deduction Remove the postgraduate loan when processing the payroll. Only do this when notified by HMRC. If taken in error, you must edit all effected pay runs. Read Stop a postgraduate loan deduction. |