What is the official student loan repayment threshold 2026 for each plan?

For the 2026/27 tax year, the annual thresholds are: Plan 1 is £24,990; Plan 2 is £27,295; Plan 4 is £31,395; Plan 5 is £25,000; and Postgraduate loans are £21,000. You only start repaying your loan once your gross income exceeds the threshold for your specific plan.

What are the main student loan plan 1 plan 2 differences?

The main differences lie in the thresholds, repayment rates, interest rates, and write-off terms. Plan 1 has a lower threshold (£24,990) and interest is linked to the Bank of England base rate. Plan 2 has a higher threshold (£27,295) and interest rates are linked to the Retail Price Index (RPI) + up to 3%. Furthermore, Plan 2 loans are written off after 30 years, whereas Plan 1 loans are written off after 25 years (if taken out before 2006) or 30 years.

What is the postgraduate loan repayment rate in the UK?

The Postgraduate loan repayment rate is 6% of your earnings above the threshold of £21,000. If you also have an undergraduate loan, you will pay both simultaneously: 9% for the undergraduate loan above its threshold, and 6% for the Postgraduate loan above £21,000, leading to a combined 15% marginal deduction.

How does a student loan deduction paye affect my tax code and monthly pay?

Student loan repayments do not change your tax code. Instead, they are calculated and deducted separately from your gross pay by your employer's payroll system alongside Income Tax and National Insurance. The repayment is taken after basic pension contributions, so it reduces your net take-home pay.

Are student loan repayments calculated on weekly/monthly pay or annual income?

For PAYE employees, student loan repayments are calculated on your earnings for each individual pay period (e.g., weekly or monthly) rather than your annual income. If you receive a one-off bonus in a single month that pushes your pay above the monthly threshold equivalent, you will pay 9% on the excess for that month, even if your total annual income is below the annual threshold.

What happens to my student loan repayments if my salary drops?

Repayments stop automatically if your gross income drops below the threshold for your plan. Because repayments are tied directly to your income, you are never required to make payments when you are not earning above the threshold, providing a safety net if you lose your job or take a pay cut.

Can I get a refund if my student loan was over-deducted during the year?

Yes. If your total annual income at the end of the tax year is below the annual threshold, but you had student loan deductions taken in specific months due to bonuses or overtime, you can contact the Student Loans Company (SLC) at the end of the tax year to claim a full refund of those deductions.

Do student loan repayments affect my credit score in the UK?

No. UK student loans do not appear on your credit report, and they do not affect your credit score. However, mortgage lenders will ask if you have a student loan because the monthly repayments reduce your net take-home pay, which reduces the amount you are allowed to borrow under mortgage affordability rules.

Student Loan Calculator UK (2026/27): Plan 1, 2, 4, 5 & Postgrad Repayments

Student Loan Repayment Calculator

✓ Verified for 2026/27

Repayment Details

Gross Annual Salary

Current Loan Balance

Student Loan Plan

Annual Interest Rate

Monthly Repayment

£0

deducted from pay

Annual Repayment

£0

yearly total

Interest Accrued

£0

added annually

Net Balance Change

£0

per year

Repayment Summary

Annual Repayments £0

Interest Charged £0

Estimated Year-End Balance £0

Repayments 0%

Interest 0%

Frequency	Gross Salary	Repayment	Remaining Salary
Annual	–	–	–
Monthly	–	–	–
Weekly	–	–	–

ℹ️ Student Loan repayments are calculated on gross income above specific thresholds: Plan 1 (£24,990), Plan 2 (£27,295), Plan 4 (£31,395), Plan 5 (£25,000) at 9%, and Postgraduate (£21,000) at 6%. If repayments are lower than interest accrued, the loan balance will increase.

🛡️

Verified for Accuracy (2026/27 Tax Year)

Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.

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

Detailed Math for Plan 2 Student Loan on a £40,000 Gross Salary

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.)

Detailed Math for Combined Plan 1 and Postgraduate Loans on a £35,000 Salary

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

How are UK student loan deductions calculated?

UK student loan repayments are calculated on a progressive margin rather than your total outstanding debt. You only make repayments if your gross income exceeds the repayment threshold for your specific loan plan. Repayments are calculated as 9% of your gross earnings above the threshold for undergraduate plans (Plans 1, 2, 4, and 5) and 6% for Postgraduate loans (PGL). For example, under Plan 2, which has a threshold of £27,295 for the 2026/27 tax year, if you earn £35,000, you pay 9% of the £7,705 margin, resulting in a monthly deduction of approximately £57.78. Deductions are processed automatically by your employer via the PAYE payroll system alongside income tax, and if your income drops below the threshold in any month, your repayments automatically stop.

What are the different student loan plans and thresholds?

If you hold both an undergraduate and a postgraduate loan, your deductions stack, resulting in a combined marginal repayment rate of 15% on your highest earnings.