Student Loan Repayment Calculator
✓ Verified for 2026/27Repayment Details
Repayment Summary
How We Calculated This
- Identify Your Specific Student Loan Plan: Determine which plan applies to your course and starting year. Plan 1 is for English and Welsh students who started before 1 September 2012, and all Scottish and Northern Irish students. Plan 2 is for English and Welsh students who started between 1 September 2012 and 31 July 2023. Plan 4 is for Scottish students. Plan 5 is for English students who started on or after 1 August 2023. Postgraduate loans are for master's or doctoral courses.
- Establish the Plan-Specific Repayment Thresholds: For the 2026/27 tax year, identify the statutory income thresholds below which no student loan repayments are due. The thresholds are: Plan 1 is £24,990 per year (£480.57 per week); Plan 2 is £27,295 per year (£524.90 per week); Plan 4 is £31,395 per year (£603.75 per week); Plan 5 is £25,000 per year (£480.76 per week); and Postgraduate loans are £21,000 per year (£403.84 per week).
- Assess Total Gross Earnings: Calculate your total gross earnings in the relevant pay period (weekly, monthly, or annual). Student loan deductions are calculated on a periodic basis matching your payroll cycle, using gross pay before tax and National Insurance, but after pension contributions made under salary sacrifice or Net Pay arrangements.
- Apply the Repayment Percentage: Multiply the earnings exceeding the threshold by the standard repayment percentage. For undergraduate loans (Plans 1, 2, 4, and 5), the repayment rate is 9%. For Postgraduate loans, the repayment rate is 6%. If you have both an undergraduate and a postgraduate loan, you repay both concurrently (e.g., a total rate of 15% on income above the thresholds).
- Process Student Loan Deduction via PAYE: Deduct the calculated repayment amount from your gross salary. Under the student loan deduction paye rules, your employer is responsible for calculating and deducting the repayment from your pay packet each pay period and transferring it to HMRC, who then routes it to the Student Loans Company (SLC).
- Account for Self Assessment: If you are self-employed or have non-PAYE income, you must calculate and pay your student loan repayments through your annual Self Assessment tax return. HMRC will calculate the total due based on your annual self-employed profits and other taxable income above the relevant plan thresholds.
Real-World Examples
This scenario details the exact step-by-step mathematical calculations for an employee earning £40,000 gross per year in the 2026/27 tax year under a Plan 2 student loan repayment schedule.
Step 1: Gross Salary = £40,000.00
Step 2: Identify Plan 2 Threshold = £27,295.00 per year
Step 3: Calculate Earnings Exceeding Threshold:
Excess Earnings = £40,000.00 - £27,295.00 = £12,705.00
Step 4: Apply Repayment Rate (9%):
Annual Repayment = £12,705.00 * 0.09 = £1,143.45
Step 5: Convert to Monthly Deduction:
Monthly Repayment = £1,143.45 / 12 = £95.28
(Your payslip will show a student loan deduction of £95.00 due to rounding rules.)This scenario shows how repayments work when an employee holds both a Plan 1 undergraduate loan and a Postgraduate loan, which must be repaid concurrently.
Step 1: Gross Salary = £35,000.00
Step 2: Calculate Plan 1 Repayment (Threshold = £24,990.00 at 9%):
Excess Earnings (Plan 1) = £35,000.00 - £24,990.00 = £10,010.00
Plan 1 Annual Repayment = £10,010.00 * 0.09 = £900.90
Plan 1 Monthly Repayment = £900.90 / 12 = £75.07
Step 3: Calculate Postgraduate Repayment (Threshold = £21,000.00 at 6%):
Excess Earnings (Postgrad) = £35,000.00 - £21,000.00 = £14,000.00
Postgrad Annual Repayment = £14,000.00 * 0.06 = £840.00
Postgrad Monthly Repayment = £840.00 / 12 = £70.00
Step 4: Sum Total Repayments:
Total Monthly Repayment = £75.07 + £70.00 = £145.07
(Both deductions are taken from your monthly gross pay.)Related Calculators
Frequently Asked Questions & Detailed Tax Guide
How do student loan repayments work in the UK?
UK student loans are not commercial debts. Repayments are calculated as a percentage of your income and are deducted from your salary through payroll, alongside income tax and National Insurance. Deductions are calculated on your gross pay before tax. Your repayment plan depends on when you started your university course and your location. If your income falls below the plan’s threshold, repayments stop automatically. Crucially, loans are written off after 30 or 40 years, depending on your plan.
What are the rates and thresholds for student loan plans in 2026/27?
Repayments are calculated on earnings above these thresholds for 2026/27:
– Plan 1: £24,990 threshold, 9% repayment rate.
– Plan 2: £27,295 threshold, 9% repayment rate.
– Plan 4 (Scotland): £31,395 threshold, 9% repayment rate.
– Plan 5 (Courses starting Sep 2023 onwards): £25,000 threshold, 9% repayment rate (written off after 40 years instead of 30).
– Postgraduate Loan (PGL): £21,000 threshold, 6% repayment rate.
Step-by-Step Mathematical Calculation: Combined Plan 2 and Postgraduate Loan
Let’s calculate the monthly student loan deductions for an employee earning a gross salary of £45,000 (£3,750 per month) who holds both a Plan 2 loan and a Postgraduate loan:
- 1. Gross Monthly Salary: £3,750.00.
- 2. Calculate Plan 2 Repayment:
– Monthly Threshold: £27,295 / 12 = £2,274.58.
– Taxable monthly excess: £3,750.00 – £2,274.58 = £1,475.42.
– Repayment (9%): £1,475.42 * 9% = **£132.79**. - 3. Calculate Postgraduate Loan Repayment:
– Monthly Threshold: £21,000 / 12 = £1,750.00.
– Taxable monthly excess: £3,750.00 – £1,750.00 = £2,000.00.
– Repayment (6%): £2,000.00 * 6% = **£120.00**. - 4. Total Monthly Student Loan Deductions: £132.79 + £120.00 = **£252.79**.
Tax Expert Pro-Tips: Resisting the Urge to Pay Off Early
David Vance, CTA FCA, recommends: “For the vast majority of graduates, making voluntary overpayments to clear their student loan early is a financial error. Because the debt is written off after 30 years and does not affect your credit rating, any extra cash you pay is wasted unless your career trajectory guarantees you will repay the full balance. Keep your cash and invest it in a tax-free ISA or workplace pension, where you have access and compounding growth.”
Legislative References
- Teaching and Higher Education Act 1998 (Section 22) – Legal authority for the student loan repayment scheme.
- Education (Student Loans) (Repayment) Regulations 2009 – Statutory instrument detailing payroll calculations.