Student Loan Self Assessment Confusion

lordnadez

I earn £39,000 per year, and my P60 shows I earned £37,050 due to £1,950 going to my workplace pension scheme.

I earn a bit of money on the side doing freelance (only about 2-3k), so I do a self assessment.

I pay a Plan 4 student loan, which is 9% above the threshold, and that automatically comes out of my payslip every month. However, when I submit my self assessment, my student loan repayments are lower than I expected because I assume it's using the £37,050 figure instead of my gross pay £39,000. The field states to use the number from my P60, so I done that.

Is this right? I am worried I'll get a bill at some point saying I've underpaid, but I done exactly what the form said, put in my exact number from my P60.

kaMelo

Student loan repayments on PAYE are calculated on all income that is liable for NI, so, whether you need to include your pension contributions in your earnings depends upon how you make those contributions. If the contributions are made via salary sacrifice then, as they are not subject to NI, they are not included in the calculation. If however they are made via a net pay scheme or relief at source scheme, as these contributions are liable for NI, they should be included in your earnings per pay period for calculating your student loan repayments.

PS, as you self assess don't forget to include all unearned income such as savings interest too, if this exceeds £2000 then the entire amount is included as income in the repayment calculation.

silvercar

@lordnadez, I’ll move this to the student board.