HMRC have issued updated guidance to employers on how to deal with student loan deductions via the PAYE system. Employers should familiarise themselves with the guidance which has been updated to reflect the introduction of plan 2 loans which are repayable from a different threshold but at the same nine percent basis. With effect from the 2016/17 tax year there are two plan types for student loan repayments: plan 1 with a threshold of £17,495 (£1,457 a month or £336 per week) plan 2 with a threshold of £21,000 (£1,750 a month or £403 per week) The updated guidance includes the following advice on identifying the plan type: 'Start making student loan deductions from the next available payday using the correct plan type if any of the following apply: your new employee's P45 shows deductions should continue - ask your employee to confirm their plan type your new employee tells you they're repaying a student loan - ask your employee to confirm their plan type your new employee fills in a starter checklist showing they have a student loan - the checklist should tell you which plan type to use HM Revenue and Customs (HMRC) sends you form SL1 'Start Notice' - this will tell you which plan type to use If your employee doesn't know which plan type they're on, ask them to contact the Student Loan Company (SLC). If they're still unable to confirm their plan type, start making deductions using plan type 1 until you receive further instructions from HMRC.' If you would like any advice or help with payroll matters please get in touch. Internet link: Guidance