HMRC has published details of the new thresholds which are:
- Plan 1 loans: £22,015 (up from £20,195)
- Plan 2 loans: £27,295 (unchanged)
- Plan 4 loans: £27,660 (up from £25,375)
- Plan 5 loans: £25,000 (this is a new type of student loan from 6 April 2023)
- Postgraduate loan: £21,000 (unchanged)
The deductions for loan repayments for types 1, 2, 4 and 5 are at 9% of pay above the threshold and for postgraduate loans, 6%. Payroll software should work the deductions out automatically as long as the update for the 2023/24 year has been installed.
Where an employee’s earnings are below the limits and you receive an SL1 or PGL1 notice from HMRC, you should note your payroll records to ensure that deductions are not missed if the employee’s pay increases.
New earnings limits for student loan repayments for employees apply for Plan 1 and Plan 4 loans from 6 April 2023. There is no change to the limits for Plan 2 and postgraduate loans.