Employers are required to deduct student loan repayments through the PAYE system when an employee completes a Tax code declaration (IR 330) using one of these codes: M SL, ME SL, S SL, SH SL, SB SL or ST SL.
Employees with student loans who only have one main job should use the M SL or ME SL tax code.
This code includes student loan deductions which are set at 12 cents in the dollar for every dollar earned over the repayment threshold:
|Threshold period||Threshold 1 Apr 2018 to 31 Mar 2019||Threshold 1 Apr 2019 to 31 Mar 2020||Increase|
Employers also need to deduct student loan repayments at this rate from redundancy and lump sum payments.