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Student and postgraduate loans

Created on  | Last modified on 

Summary

Information on student and postgraduate loans in Sage 50 Payroll.

Description

Deductions rates and thresholds

There are four types of loans:

  • Plan Type 1
  • Plan Type 2
  • Plan Type 4 – new plan type, Scottish Student Loans (SSL)
  • Postgraduate loan (PGL)

You can check the thresholds from which deductions apply and the rate of deductions in your software:

  1. Click Company, then Legislation.
  2. Click the Student/Postgraduate tab.

 NOTE: If you'd like to find out more, visit Gov.UK >

Start notice (SL1/PGL1)

It is important that you:

  • Check your HMRC online account for either student loan or Postgraduate loan, or both, start and stop notices
  • Take the correct action to start student and or postgraduate loan deductions as soon as possible
  • Record the deductions correctly on your Full Payment Submission (FPS)

This ensures any employees who have these loans don't pay any more or less than necessary.

TIP: You can set up the IR Secure Mailbox in Sage 50 Payroll to receive notifications and messages from HMRC. Read more > 

If you receive a SL1 and or PGL1 from HMRC, it is important that you:

  • Use the correct loan or plan type
  • Check the start date shown on the notice and take deductions from the next available pay day

You can set up and process student and postgraduate loans in Sage 50 Payroll. Read more >

Off-payroll working rules

Organisations are not responsible for deducting either student loan or postgraduate loans, or both, for workers engaged through their own companies. The worker will account for either student loan or postgraduate loan, or both, obligations in their own tax return. Read more >

Scottish student loans

Plan type 4 applies to Scottish student loans.

This impacts employers across the UK, not only those located in Scotland. It applies to employers who have employees paying back their loan from Student Award Agency for Scotland (SAAS).

HMRC notifies employers by a student loan start notice, SL1 for all affected employees.

Next steps

You can follow our simple step guide to set up student and postgraduate loans within Sage 50 Payroll. Read more >

If you'd like to see examples of the calculation, visit our student loan - example calculations guide.