Understand the critical £2,000 unearned income threshold and its impact on student loan calculations. Dividends, property income, and other unearned income can trigger significant SA payments.
Your unearned income: £23,000
Threshold: £2,000
Result: ALL £23,000 included for student loan calculation
All-or-nothing: Below £2,000 = ignored, Above £2,000 = all included for student loans.
After expenses, before finance costs
From P60 or payslips (annual total)
Critical Range: £1,900 - £2,100 unearned income creates maximum planning opportunities and risks.
Limited company director:
Taking £12,570 salary + £40,000 dividends triggers £1,758 student loan payment. Consider whether higher salary with PAYE deductions might be more tax-efficient.
Property investor:
Rental profits of £8,000 push total unearned income above £2,000, creating student loan liability on ALL unearned income. Consider timing of rental income or expense planning.
Threshold management:
If close to £2,000, small adjustments in timing can save significant amounts. However, don't let the tail wag the dog - overall tax efficiency matters more than just student loan optimization.
The £2,000 unearned income threshold can have dramatic effects on student loan liability. Get professional advice on optimizing your income structure.