New rates for the tax year 2020/21 for Student Loan Plans 1 and 2 have been announced by the Department of Education. The Student Loan Plan 1 rate will rise to £19,390 on 6th April 2020 from £18,935. The current Plan 2 rate of £25,725 will also rise to £26,575. Earnings above the thresholds for both Plan 1 and Plan 2 for 2020/21 will be calculated as normal at 9%.
The rate of the postgraduate loan type introduced in the 2019/20 tax year of £21,000 will remain the same in 2020/21 and will continue to be calculated at 6%.
Summary of the Student Plan thresholds:
This figure will apply to all current and future borrowers for whom employers make Student
Loan deductions. In BrightPay Payroll Software 2020/21, the new student loan repayment thresholds for both plans will automatically be calculated and the appropriate student loan deduction applied.