New hire has a student loan — what do I actually need to do in payroll?

You're not alone — this trips up most first-time employers, but it's straightforward once the plan type is set. Start with the starter checklist: the employee should have ticked which loan plan they're on, and the plan type is simply the one their loan was taken out under — Plan 1 (started before September 2012 in England and Wales), Plan 2 (September 2012 onwards), Plan 4 (Scotland), Plan 5 (England, started August 2023 onwards), or a separate postgraduate loan. If you're unsure, HMRC will send you a start notice (SL1) — never guess, because the thresholds differ: for 2026-27 they're £26,900 a year (Plan 1), £29,385 (Plan 2), £33,795 (Plan 4), £25,000 (Plan 5), and £21,000 for postgraduate loans. Set the plan type in your payroll software and it handles the rest automatically: 9% of pay above the plan threshold (6% for postgraduate loans), calculated each pay period. You don't file anything extra — the deductions are reported to HMRC in your regular Full Payment Submission (FPS), and the amounts just flow through your PAYE bill. One common trap: an employee can have both a plan-type loan and a postgraduate loan, in which case both deductions apply side by side.