PAYE amounts after student loan paid off

PJHilder
PJHilder Posts: 155 Forumite
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in Student MoneySaving
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.

Comments

  • liz_bartun
    liz_bartun Posts: 183 Forumite
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    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
    sheramber Posts: 19,105 Forumite
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    You may be better posting on the Cutting Tax forum
  • silvercar
    silvercar Posts: 46,957 Ambassador
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    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.
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