SL1 Student Loan Start Notice: What Employers Do When It Arrives

This guide follows HMRC's student loan and postgraduate loan repayment guidance for employers, updated in April 2026, and the 2026 to 2027 rates and thresholds, as of October 2026.

Why you get an SL1

HMRC sends one when an employee on your payroll has a student loan deduction due. It's one of six ways you can learn an employee is a borrower. The others are a P45 showing deductions should continue, the employee telling you, a starter checklist that says so, a PGL1 for a postgraduate loan, or a reminder message in PAYE Online.

The SL1 is the one that settles the plan type. Everything else is a starting point until it arrives.

The thresholds you'll deduct against

Plan	Yearly threshold	Monthly	Weekly
Plan 1	£26,900	£2,241.66	£517.30
Plan 2	£29,385	£2,448.75	£565.09
Plan 4	£33,795	£2,816.25	£649.90
Plan 5	£25,000	£2,083.33	£480.76
Postgraduate loan	£21,000	£1,750	£403.84

These apply from April 2026, as of October 2026. Employees repay 9% of earnings over the threshold for Plans 1, 2, 4 and 5, and 6% for a postgraduate loan. Earnings mean the same gross pay you'd use for employer's secondary Class 1 National Insurance.

What to do when one lands

Situation	What HMRC says to do
You've never employed the person	Contact the Employer Helpline, file the SL1 away, and HMRC will investigate
The employee says they've never had a student loan	Start deductions in line with the notice anyway, and keep going unless HMRC says otherwise
You're already deducting for them	Check the plan type on the SL1, and switch at the next payday if it's different
The start date is after they've left you	Don't start deductions, and leave box 5 of the P45 blank

The second row surprises people. An employee's word isn't enough to ignore an SL1. If they think they've overpaid, they ask for a refund themselves.

Before the SL1 arrives: the Plan 5 default

If a new starter tells you they have a loan but doesn't know which plan, ask them to check their repayment plan. If they still can't tell you, use Plan 5 in your payroll software until the SL1 comes. That default only works for Plan 1, Plan 2 or Plan 4 loans.

If the employee is on more than one plan, start with the plan that has the lowest threshold until the SL1 confirms which to use.

No deductions in arrears

Start from the next payday and never go back. If an employee's P45 turns up after they've started, and they didn't mention a loan or there's been a gap since their last job, ask them to confirm their plan and start from the next payday. HMRC's guidance is plain that you don't make any deductions in arrears.

If the pay interval changes

Deductions follow the earnings period, so a switch from weekly to monthly pay needs care. HMRC's example is a Plan 1 borrower paid £700 a week who moves to monthly pay of £2,800 in the third week of the month. Weeks 1 and 2 each take £16. Week 4's monthly deduction on £2,800 is £50, but £32 has already gone, so only £18 is deducted then. The same approach as National Insurance applies.

Seconded staff from overseas

Someone seconded to work in the UK by an overseas employer fills in a starter checklist like anyone else. If they say they have a student loan or postgraduate loan, start deductions from the next payday, without waiting for an SL1.

The reminder that means an SL1 is coming

HMRC sends four kinds of generic notification service reminders about student loans to your PAYE Online account. The first fires when your Full Payment Submission shows a nil deduction for someone who should be repaying. HMRC says that reminder confirms it has sent, or is sending, an SL1 or PGL1 for the people listed.

The second fires when the plan type on your FPS doesn't match HMRC's records. Start the right deductions from the first available payday, using the SL1, PGL1 or starter checklist. HMRC recommends signing up for email alerts so you don't miss these.

Who an SL1 doesn't apply to

If you only pay someone an occupational pension, ignore student loan reminders, because pensions aren't liable. The same goes for workers engaged through their own company under the off-payroll working rules, who deal with their loan in their own tax return. Second jobs are simpler than they look: ignore earnings from another employer and work out deductions on your pay alone.

When the employee leaves

An SL1 with a start date in the current or a previous tax year means deductions should continue in the next job. Put Y in box 5 of the P45, send leaver details through Real Time Information, and give the employee parts 1A, 2 and 3. You enter Y even if they never earned enough for a deduction.

The verdict

Treat an SL1 as an instruction, not a question. Check the plan type, change your payroll at the next payday if it's different, and keep the notice with the employee's records. Don't backdate, don't stop because the employee objects, and wait for an SL2 before you switch deductions off.

If you are dealing with another form, the walkthrough of the student loan stop notice explains it step by step.

Related: writing for us on loans.

Frequently asked questions

What is an SL1 from HMRC?

It's the student loan start notice telling an employer to begin student loan deductions for an employee and which plan type to use.

When do I start deductions after an SL1?

From the next available payday. HMRC says not to make any deductions in arrears.

What if my employee says they don't have a student loan?

Start deductions in line with the SL1 anyway and keep going unless HMRC tells you otherwise; the employee can ask for a refund.

Which plan do I use before the SL1 arrives?

Ask the employee; if they can't tell you, use Plan 5 until the SL1 comes, which only works for Plan 1, 2 or 4 loans.

What's the difference between SL1 and PGL1?

An SL1 starts student loan deductions; a PGL1 starts postgraduate loan deductions, at 6% over its own threshold.