Deduction of student loan from wages

Abit of advise for you. Create a spreadsheet and keep track each pay cheque how much you have now paid in total, and keep all your pay cheques until you have sign off your loan is paid in full.

It took me 6 months to get them to stop taking money and get paid back the over pay. Student Loans and the Tax Man only communicate once a year, so at any one time, no one knows how much you have paid and how much you owe, so you need to take responsibility for it yourself.

I'm almost certain its after tax I'm afraid, I go through my DH's pay cheque each month and I'm pretty sure that his pension contribution is before tax and the loan repayment is after. Can't check as am away from home for a few weeks so don't have the paperwork - sorry.

Is it possible that some employers get it wrong? esp small businesses who haven't had to deal with it before. When DH worked on a farm they hadn't had to do it before, they were sent a table to look up how much to take off each week.

I think the interest rate is 3.2% and should drop in future.

I was very surprised to hear that deductions from pay might be from pre-tax income and on reflection this seems unlikely. But confirmation would be very helpful.

Any confusion may have arisen because repayments are "assessed on gross income" but not necessarily paid from gross income.

My guess is that overpayments won't affect your tax position one way or the other. The tax system is surely complicated enough without this additional variation. And why charge students but then give higher earning graduates tax relief? That doesn't make sense. It would mean a reduced burden on the highest earning graduates compared to "key workers". That's not Gordon's style.

P.S. I've only just seen that you will also have to pay more if your unearned income is £2K+ ( which would kick in if you had about £40K in savings). That's a bit tough on those struggling to save a decent deposit to get on the housing market.

nfg, if you save in a cash ISA @ 5% gross, then there is a useful benefit over the rpi linked student loan rate which is expected to be 2.5% as long as the government keeps inflation under control.

On further reflection, if the loan was to be repayed from untaxed income, then the Student Loan Corporation, a government appointed QUANGO, would surely spell out that fact to make everyone feel better about their government imposed debts?

No clear statement one way or the other [on their website] is surely bad news?

SLC link - How repayments are collected

Im currently paying back my student loan, and the calculations work out as follows (the amounts are examples)

Salary £20,000 a year (gross)
£15,000 of this is not counted under the current condtions for repayment.
Therefor I pay student loan repayments on £5000 a year @ 9% = £450 a year.

You can devide it down montly to £1666.67 income gross
minus the £1250 allowance is £416.67 @ 9% = Repayment of £37.50 that month.

You pay it out of your nett wage, and the repayment is TAXED, so you are still paying National Insurance and Income tax on the the £37.50 - THERE IS NO TAX BENIFIT.

So for example your £1666.67 after Tax and NI and Pension etc is for instance £1337.50, then your take home pay would be £1300.

I might add, its a MAJOR pain in the !!!!!! to repay and I wouldnt take one out again, here is why
On my overtime I get 'Taxed' the following:
22% Income Tax
11% National Insurance
9% Student loan
5% Pension
Thats 47% for my overtime pay - GONE It doesnt pay me to work for time and a half as im being fleeced, and 'Double time' is just above the normal hourly rate.

And if you a high earner its 40% Income tax (although the national insurance is capped)