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HMRC internal manual

Collection of Student Loans Manual

From
HM Revenue & Customs
Updated
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SL repayments: borrower within PAYE: pay intervals other than weekly or monthly

Guidance on calculating Student Loan deductions where the pay interval is other than weekly or monthly are given in the Student Loan Deduction Tables.

The pay period is made up of multiples of weeks or months

The employer should

1. Divide the earnings into equal weekly or monthly amounts to get an average weekly or monthly amount
   
2. Find the amount of the Student Loan deduction due for the average weekly or monthly amount by reference to the Student Loan Deduction Tables
3. Multiply the amount of the resulting Student Loan deduction by the number of weeks or months in the pay period
4. Record the multiplied amounts of the Student Loan deduction on the employee’s payroll records

The example below assumes that the annual threshold is £17,495 and the rate is 9 per cent.

Example

Pay period is 3 weeks

Earnings in period £1,500

Step 1 Earnings in a week = £1,500 / 3 = £500
   
Step 2 Student Loan deductions per Tables = £14.00
Step 3 Multiply by weeks in pay period £14 x 3 = £42.00
Step 4 Student Loan deduction = £42

The pay period is not made up of exact multiples of weeks or months

The employer should

1. Work out the number of days in the pay period
   
2. Multiply the number of days by the annual threshold and divide the result by the number of days in the year. This gives you the pay period threshold. Round down the resulting figure to the nearest penny
3. Deduct the pay period threshold from the total earnings in the pay period
4. Multiply the result of Step 3 (the excess) by the rate in force
5. If the result at Step 4 includes an amount of pence, round down the result to the nearest whole £ below
6. Record the amount of the Student Loan deduction on the employee’s payroll records

The example below assumes that the annual threshold is £17,495 and the rate is 9 per cent.

Example

Pay period is 19 days

Earnings in period £1000

Step 1 Number of days in pay period = 19 days
   
Step 2 Compute pay period threshold (19 x £17,495) / 365 = £910.69
Step 3 Deduct Step 2 result from earnings £1000 - £910.69 = £89.31
Step 4 Multiply Step 3 result by 9 per cent £89.31 x 9 per cent = £8.03
Step 5 Student Loan deduction = £8