student loan repayment

hammy174

i have been repaying student loan from the april after my course finished. i work contract jobs so do have a few weeks off in between contracts. I have just looked at my statement for 21/22. It looks complete for the year but i have calculated that 9% of the difference between my income and the student finance threshold is £2066 and the amount on the statement that i have repaid is £1627. As it has not been collected will Student finance want this difference paid. i have potential overpayments in the next 2 financial years but don't have a statement to definitively say so at this stage. 

thanks in anticipation

silvercar

I’ll move this to the student board.

generally speaking, loan repayments are conducted on a pay period. So for the months you worked and were over the threshold you should have a 9% deduction, for months were you income was less than the threshold you won’t have a deduction.
this can often explain the difference between the annual calculation and your monthly deduction totals for the year.

hammy174

thanks for your response. So that means that although my total pay (all paye) at 9% is more than that collected as it was not collected by my employers SF will not recalculate it to the higher amount and request it?

silvercar

Only if there was a mistake then would ask for it, otherwise the pay period rules apply. Generally this benefits the slc as payments are more overall, so I don’t know how your calculations have shown a lower amount. Is it possible you have overlapping contracts?

hammy174

The figures are below for the two years that i have statements for. 

tax year	income		sf threshold		difference		repayment @9%		paid		(over)/underpaid
20/21	12663		19390		-6727		0		0		0
21/22	42354		19395		22959		2066.31		1627		439.31
											0
22/23	38391		20195		18196		1637.64		1847		-209.36

hammy174

this also brings me to the next question if you have repaid more than the difference in salary over the SF threshold multiplied 9%, is it possible to have this amount (209.36) repaid?

silvercar

hammy174 said:

this also brings me to the next question if you have repaid more than the difference in salary over the SF threshold multiplied 9%, is it possible to have this amount (209.36) repaid?

Yes, if the total income for the year is under the threshold.

No, if your total income for the year is over the threshold - even if it’s over by less than the excess you’ve paid.

so, in your case, you’ve earned over the threshold for the year and aren’t entitled to a repayment.

silvercar

I’m guessing for 21/22 you had some overlapping contracts or pay periods that weren’t full months or weeks, so the threshold didn’t actually match the time period you worked eg payroll gave you 2 weeks pay using a monthly threshold.

As I said in my previous post, they won’t refund the overpayment because you went over the threshold. I don’t know whether they will ask for the underpayment.

Ed-1

silvercar said:

I’m guessing for 21/22 you had some overlapping contracts or pay periods that weren’t full months or weeks, so the threshold didn’t actually match the time period you worked eg payroll gave you 2 weeks pay using a monthly threshold.

As I said in my previous post, they won’t refund the overpayment because you went over the threshold. I don’t know whether they will ask for the underpayment.

It's not an 'overpayment' or an 'underpayment'. It is what it is.

It follows National Insurance calculation rules which are based on pay period thresholds, not annual thresholds.

Income tax is different and is always calculated based on an annual threshold with a tax code used through the year to attempt to keep you on track for the right amount of tax paid over the year, but is then reviewed after the tax year end to reconcile the right amount of income tax based on known earnings over the tax year.

National Insurance can never be refunded. E.g. earn £2,000 one month and nothing for the rest of the tax year and you'll pay National Insurance but not income tax. You'll also pay student loan but can reclaim that if earnings over the tax year are below the annual threshold. Otherwise you can't reclaim it as it is the right repayment.

If you fill in a tax return, the annual threshold is then used to calculate student loan repayments with credit given for any PAYE deductions already made. This could increase repayments.