In this short article, we have outlined some important recent payroll related changes.

Changes in student loan repayments

Plan 1

The repayment threshold for ‘plan 1’ student loans rose by £555 on 6 April 2018 to £18,330 a year and the amount repaid each month fell by approximately £50.

Plan 2

The repayment threshold for ‘plan 2’ student loans rose by £4,000 on 6 April 2018 to £25,000 a year and the amount repaid each month fell by approximately £30.

From 6 April 2019 the repayment threshold will rise annually in line with average earnings.

OpRA – Optional Remuneration Arrangement

On 6 April 2018 the legislation regarding salary sacrifice schemes changed. As a result of the changes, there are no longer any tax advantages to be gained from giving up the right to cash in return for a non-cash benefit. The taxable value of a BIK is now the higher of:

  • Cash equivalent of BIK; or
  • The amount of salary less any amounts made good by the employee.

For example, if employees where offered the choice of:

  1. a) Company car worth £3,500; or
  2. b) £4,000 cash.

An employee who chose the cash would be unaffected by the change in legislation and tax and NIC on the extra £4,000 would be deducted. However, an employee who chose the car would be taxed on £4,000 rather than the cash equivalent of the benefit received from the company car (£3,500).

However, the changes do not apply to the following benefits;

  • Pension contributions;
  • Tax exempt childcare;
  • Cycle to work schemes;
  • Purchase of annual leave; or
  • Company cars with CO2 emissions of 75g or less.

Therefore, these payments which are typically made via ‘salary sacrifice’ arrangements may continue to be advantageous, depending on your circumstances.


Phase one of increasing the statutory pension minimum contributions took place on 6 April 2018 and the second phase will take place on 6 April 2019.  By law a total minimum amount of contributions must be paid into the scheme. Employers must make a minimum contribution towards this amount and employees make up the difference. If the employer decided to pay the total minimum contribution, then employee won’t need to contribute anything.

The table below shows the minimum pension contributions.

Should you have any queries relating to payroll (or indeed any other matters) please feel free to contact the team at RBL.

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