As an employer, you are responsible for checking if a new employee needs to make repayments on a student loan and making the deductions where necessary. You must also keep records of any repayments as part of your payroll process.
If you have an employee that has a student loan, you will be able to set up automatic deductions within Pegasus Opera 3. The current HMRC legislation dictates that employers will need to make student loan deductions if the employee's total pay exceeds the current student loan threshold and any of the following conditions apply:
• A new employee has presented a P45 with a Y in box 5 - “Student Loan deductions to continue”. • A new employee has presented a P46 with an entry in box D for Student Loans. • HMRC has sent out a SL1 Start Notice form.
Before you can enable student loan deductions for an employee, you must ensure that the following has been carried out:
1. You must create a student loan deduction profile for the relevant "Type". Student Loan repayments will be defined in the deduction profile screen by the type “L”.
This can be checked via Payroll > Maintenance > Deduction Profile
2. The correct threshold settings need to be set for the Student Loan deductions in Pegasus Opera 3 via Payroll > Utilities > PAYE /NI/Stat. Payments
There will be two tables, allowing you to enter settings for both the current year and the next, as the rates may change from year to year (up-to-date information can found via HMRC if you are not sure).
3. You can then enable the student loan deductions via Payroll & HR > Processing > Find your employee, then go to Action > Details & Bank.
In the following screen you can tick the box marked "Student Loan" to activate the student loan deductions for this employee.
Once you have saved the record, this will activate the student loan deductions to be carried out automatically upon running a calculation.
If you would like Pegasus Opera 3 training on this subject and any other Opera 3 Payroll training please contact us via info@intsysuk.com.
If you would like a downloadable version of this document please click here.
Disclaimer: This document is intended to provide general advice and has been prepared as a guide only. It is the user’s responsibility to decide how they want to proceed with the information given. Intsys UK Ltd accepts no responsibility for any errors, omissions, or misleading statements on these pages.