PAYE amounts after student loan paid off 13 September 2019 at 2:33PM in Student MoneySaving 3 replies 2.4K views

PJHilder

So up until last month I was paying off my student loan via PAYE via my umbrella company. The loan deduction was around £120 a week as I'm paid weekly. The PAYE amount per week was around £292.

Since I've had the student loan deduction removed my PAYE deduction has gone up roughly by the amount the loan deduction was. I was under the impression I'd be paying nearly the same amount of PAYE.

Has my umbrella made a mistake or am I just misunderstanding how it works?

Thanks in advance.

liz_bartun

If you put a 'salary' into a salary calculator it doesn't make any difference to tax/NI/pension contributions when the student loan is removed. But umbrella company pay can be quite different to a standard employee salary arrangement. You should really ask your umbrella company to clarify the situation.

Also, check your tax code hasn't changed.

sheramber

You may be better posting on the Cutting Tax forum

silvercar

Your student loan deduction is an amount calculated as a set percentage of all earnings (gross) over the threshold.

Once you stop paying your student loan, you won’t have the deduction, so your take home pay should increase by the amount that was going to student loan repayments. This is for PAYE, if you have dividend income the repayments may be calculated differently.

It does depend how the umbrella company calculates your income.