Payroll UK - Support for Plan 1 and Plan 2 student loans concurrently
Payroll UK Student Loans
Some employees can have Plan 1 and 2 at the same time. At present Xero payroll can only deal with 1 plan. The option should exist for an employee to select more than 1 Plan and the correct deductions be made.
This is how repayments are allocated between Plan 1 and Plan 2 loans
For the 2023/24 tax year the repayment thresholds are as follows:
• Plan 1 loans: £22,015
• Plan 2 loans: £27,295
If you earn below £22,015 you will make no loan repayments.
If you earn between £22,015 and £27,295 you will make Plan 1 loan repayments only.
If you earn over £27,295 you will make repayments which will be spread across both your Plan 1 and Plan 2 loans. This means that repayments calculated on income between £22,015 and £27,295 will be allocated against your Plan 1 loan and repayments calculated on your income above £27,295 will be allocated against your Plan 2 loan.
It's important that Xero Payroll can deal with this scenario.
Fiona Beech
shared this idea
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Karl Trotter
commented
Hi
You need to enable including 2 student loans on the tax return. I have clients with both plan 1 and plan 2 loans and I am unable to include both which means the return is incorrect -
Vilija Blazeviciute
commented
We have an employee that is paying into 3 plans all together!!!