Student loans have become more complicated!

If you run a payroll beware that there are two types of student loan plans – plan 1 and plan 2.

Plan 2 only applies to England and Wales. The threshold for plan 1 is £17,495 before repayments are taken. For plan 2 it is £21,000.

When a new starter joins your payroll they must tell you which plan they are repaying.

If the employee does not know, then the default position is to treat it as a plan 1 loan.