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Student Loan Advice for Parents & Nannies

2019 March 11

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A nanny may have an outstanding student loan when starting work for a parent, this will either be noted on their P45 from previous employment, or HMRC will send a notice through to the parent or the parent’s payroll agent.

If a nanny does not have a P45 from previous employment, they must complete a Starter Checklist. On the Starter Checklist, it will ask if a nanny has a student loan and what Plan they are on.

Student Loan deductions from a nanny’s gross wage are payable to HMRC along with tax, National insurance and employers National Insurance. This will be paid to HMRC quarterly unless the PAYE exceeds £1,500 a month.

The thresholds for Student Loan deductions are:

  • Plan 1 – £18,330 annually (£1527.50 a month or £352.50 a week)
  • Plan 2 – £25,000 annually (£2083.33 a month or £480.76 a week)

Nannies pay 9% of their salary above these thresholds.

Plan 1 is for students that lived in England, Wales, Scotland and Northern Ireland and started their course before September 2012.

Plan 2 is for students that lived in England and Wales who started their course after September 2012.

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