Student loan repayments from salary

Payroll starts taking student loan repayments once your earnings pass the threshold for your plan. For 2026/27 that means 9% of everything above £26,900 on Plan 1, £29,385 on Plan 2, £33,795 on Plan 4 and £25,000 on Plan 5. A Postgraduate Loan is 6% above £21,000 and is paid on top of any other plan. Under the threshold you pay nothing, and the amount moves with your pay.

The thresholds for 2026/27

Payroll uses the monthly or weekly figure for each pay period.

Plan	Annual	Monthly	Weekly	Rate
Plan 1	£26,900	£2,241.66	£517.30	9%
Plan 2	£29,385	£2,448.75	£565.09	9%
Plan 4 (Scotland)	£33,795	£2,816.25	£649.90	9%
Plan 5	£25,000	£2,083.33	£480.76	9%
Postgraduate Loan	£21,000	£1,750	£403.84	6%

The employee page on gov.uk shows these rounded to whole pounds (£2,241 a month for Plan 1, for example). The Plan 2 threshold is held at £29,385 until the end of 2029-30, so it will not rise with pay awards over that period.

Which plan you are on

Your plan is set by where you lived when you applied and when your course started. Where you studied or work now makes no difference.

• Plan 1: older loans for students from England and Wales, and loans for students from Northern Ireland.
• Plan 2: students from England and Wales who started after Plan 1 closed to them, up to the point Plan 5 replaced it in England.
• Plan 4: students from Scotland.
• Plan 5: the current plan for students from England starting undergraduate courses after Plan 2 closed to new borrowers.
• Postgraduate Loan: master’s and doctoral loans from England and Wales.

The exact start dates for each plan are on the gov.uk page “which repayment plan you are on”. The quickest way to check your own is to sign in to your Student Loans Company online account, which shows every loan you hold and its plan.

How payroll works it out

Each payday stands alone for student loans. Income tax is tracked cumulatively across the year, but repayments are not. Payroll takes your gross pay for the period, subtracts the monthly or weekly threshold and takes 9% (or 6% for a Postgraduate Loan) of what is left.

Say you are on Plan 2 and earn £32,073 a year, the entry point of NHS band 5 in England, paid monthly.

• Monthly pay: £2,672.75.
• Above the Plan 2 monthly threshold of £2,448.75: £224.
• Repayment: £224 × 9% = £20.16 a month, about £242 a year.

On the same salary, a Plan 1 borrower would repay about £466 a year and a Plan 5 borrower about £637. A Plan 4 borrower would repay nothing, because £32,073 is below £33,795.

Overtime, bank shifts, back pay and a pay award arrears payment all count as pay for that period, so a big month means a bigger deduction even if your annual salary is under the threshold. If you end the tax year below the annual threshold, you can ask the Student Loans Company to refund what you paid.

More than one loan

Someone with loans on two plans, say Plan 1 from a first degree and Plan 2 from a second, repays 9% in total. The deduction starts at the lower threshold and the Student Loans Company divides it between the plans.

A Postgraduate Loan is separate and is added on top. Someone with Plan 2 and a Postgraduate Loan repays 9% above £29,385 and 6% above £21,000 at the same time. See postgraduate loan repayments.

How deductions start

Your employer only takes repayments once HMRC tells them to. That happens when you tick the student loan box on your starter checklist, or when HMRC sends a notice to start deductions. Start work without telling payroll and deductions may begin months later, with the Student Loans Company asking you to pay any shortfall directly.

Look for a “Student Loan” or “SL” line on your payslip, with the plan type. If payroll has the wrong plan, ask them to correct it. The error can cost hundreds of pounds a year in either direction.

Interest and write-off

Interest is added to your balance and does not come out of your pay. The rates on gov.uk at the time of checking were 4.1% for Plans 1, 4 and 5, 6% for the Postgraduate Loan, and between 4.1% and a 6% cap on Plan 2 depending on income. These change during the year, so check the current figures.

Each plan is written off after a set period or at a set age, and on death or permanent disability. The rules differ between plans and sit in the Student Loans Company’s terms and conditions on gov.uk. For voluntary extra repayments, the Student Loans Company and independent money guidance services can explain the options.

Separate guides cover Plan 1, Plan 2, Plan 4 and Plan 5. The take-home pay calculator shows the effect on monthly pay alongside tax and NI.