The Department of Education have announced the new student loan thresholds that will apply from 6th April 2021.
The repayment threshold for Student Loan Plan 1 will increase by 3% and the repayment threshold for Student Loan Plan 2 will increase by 2.7%.
The repayment threshold for the Postgraduate loans will remain the same.
For any loans before 2012, Plan 1 Loans will apply and for loans after 2012 Plan 2 Loans will apply.
Earnings above the thresholds for both Plan 1 and Plan 2 for 2021/22 will be calculated as normal at 9%. The rate of the postgraduate loan type introduced in the 2019/20 tax year will continue to be calculated at 6%.
Summary of the Student Plan thresholds:
A Student Loan Type 4 will come into effect from 6th April 2021 for students who have taken a loan out in Scotland. The First Minister has committed to the student loan repayment threshold which will rise to £25,000 in Scotland from April 2021.
In BrightPay 2021/22, the new student loan repayment thresholds for both plans will automatically be calculated by the payroll software and the appropriate student loan deduction applied.