Starting a New Employee

HMRC Starter ChecklistYou usually have to pay your employees through PAYE if they earn £118 or more a week (£512 a month or £6,136 a year).You must tell HMRC about your new employee on or before their first pay day.
  1. Tell HMRC about a new employee.
  2. Get their personal details and P45 to work out their tax code.
  3. If you don’t have their P45, use HMRC’s ‘starter checklist’
  4. Check what to do when you start paying your employee.

You only need a starter checklist from your employee to work out their tax code if they do not have a P45, or if they left their last job before 6 April 2018.

You do not need to operate PAYE on volunteers if they only get expenses that are not subject to tax or National Insurance

Operate PAYE on students in the same way as you do for other employees.

Student loan repayments

You should make student loan deductions if any of the following apply:

  • your new employee’s P45 shows that deductions should continue
  • your new employee tells you they’re repaying a student loan, for example on a starter checklist
  • HM Revenue and Customs (HMRC) sends you form SL1 or form PGL1 and your employee earns over the income threshold for their loan

More details can be found here

Student Loan Repayment Plans

Student-LoansPlan types

With effect from the 2016 to 2017 tax year there are 2 plan types for student loan repayments:

  • plan 1 with a 2016 to 2017 threshold of £17,495 (£1,457 a month or £336 per week)
  • plan 2 with a 2016 to 2017 threshold of £21,000 (£1750 a month or £403 per week)

If you are unsure which plan to use, it is easy to find out by filling in the online survey here

More guidance for employers can be found here