FAQs: employers questions and answers: do I deduct a fixed amount?
No. The present rate of deduction is 9 per cent of income in excess of
- £17,495 per annum for plan 1 and
- £21,000 per annum for plan 2.
Deductions are rounded down to the nearest whole pound. Deductions will, therefore, vary depending on how much the employee earns.
In practice your payroll software both will take account of this and calculate the student loan deduction for you.
The deductions are non-cumulative. Look only at the current pay period. Don’t worry about previous earnings.
Your employee will tell you which plan type they are repaying. If they
- do not know this then they can contact the Student Loans Company (0300 100 0611) to find out
- are repaying plan 1 and plan 2 at the same time then use plan type 1.