Tell HMRC about a new employee

4. Student loan repayments

You should make student loan deductions if any of the following apply:

  • your new employee’s P45 shows that deductions should continue
  • your new employee tells you they’re repaying a student loan, for example on a starter checklist
  • HM Revenue and Customs (HMRC) sends you form SL1 and your employee earns over the income threshold for their repayment plan

What you need to do

If your new employee needs you to make student loan repayments, ask them which plan they’re on and record this in your payroll software. It will automatically calculate and make deductions.

Report these deductions to HMRC when you pay your employee.

Special rules

In some cases there are special rules for making student loan deductions. Examples include:

  • you’re sent a court order to collect a debt directly from your employee’s earnings
  • you change how often you pay your employee, such as from weekly to monthly
  • the employee has more than one job with you and you need to aggregate earnings

Stopping deductions

HMRC will send you form SL2 if you need to stop deducting student loan repayments from your employee’s pay. Don’t stop making deductions if an employee asks you to.

Print entire guide