Student loan deductions

Start from an authorised trigger

Student-loan or postgraduate-loan deductions can start from information on a P45, the employee's starter declaration, an HMRC start notice or another recognised HMRC instruction. Record the plan or loan type as well as the fact that deductions apply.

An employee can have one student-loan plan collected through payroll and a postgraduate loan at the same time. The employer does not combine earnings from a separate job when calculating its own deduction. The HMRC employer guide covers the current triggers, plan handling and less common cases.

Let payroll apply the current rules

Enter the correct plan and loan type in payroll software and let it use the current pay-period threshold and rate. Do not copy annual figures into a monthly calculation or hard-code a threshold that will age. The deduction uses the earnings basis HMRC specifies, which can differ from a simple salary figure.

For a new starter, ask the loan questions even if they provide a P45. The new-employee guidance explains how the P45, starter checklist and HMRC notices work together. If the plan is uncertain, follow HMRC's current default process until the relevant start notice arrives rather than choosing the plan that gives the smallest deduction.

Report and retain the deduction

Show the deduction on the payslip and include the correct amount and plan information in the Full Payment Submission. Keep the source instruction, payroll calculation, submission and any later start or stop notice together.

If payroll used the wrong plan or amount, follow HMRC's correction rules for the circumstances and tax year. Do not silently refund or recover an amount through an unrelated payslip line. The 2026 collection specification is versioned for the current year; use its successor when rates, thresholds or plan rules change.