How to report student loans on PAYE payroll

HMRC has issued an update to employers clarifying how to deal with student loan or postgraduate loan start notices, called SL1 or PGL1

It is important to check and use the correct loan or plan type on the start notice, and the start date shown on the notice.

This makes sure that the employee does not pay any more or less than they have to, HMRC said.

If the employee’s earnings are:

below the respective student loan and postgraduate loan thresholds, you should update the employee’s payroll record to show they have a student loan and or postgraduate loan and file the start notice — you do not need to return this to HMRC;
above the respective student loan and postgraduate loan thresholds, and deductions have not been taken, HMRC will send a generic notification service prompt as a reminder — if deductions still have not started, HMRC may contact the employer directly.

Deductions should continue until HMRC tells you to stop.

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