A student loan in the UK works less like a debt and more like an extra tax on your earnings above a threshold. What you repay each month depends on your pay and your plan, not on how much you borrowed. Two graduates on the same salary can repay very different amounts simply because they started university in different years or in different parts of the UK.
This guide explains each plan for the 2026/27 tax year (6 April 2026 to 5 April 2027), the first year in which Plan 5 is collected through payroll. The student loan repayment calculator shows your own repayment per payslip.
The short version
- Undergraduate plans take 9% of your pay above the threshold for your plan.
- The Postgraduate Loan takes 6% of pay above its own threshold, on top of any undergraduate plan.
- Plan 5 has the lowest undergraduate threshold, £25,000, and Plan 4 (Scotland) the highest, £33,795.
- Employers work out repayments on each payslip and round down to the pound.HMRC
£42
- Repayments per year
- £504
- Undergraduate plan per year
- £504
- Postgraduate Loan per year
- £0
- Threshold per payslip
- £2,448.75
- Each payslip is worked out on its own and rounded down to the pound, so a bonus month can trigger a repayment even if your yearly pay is under the threshold (you can ask for a refund).
- If you have more than one undergraduate plan, the plan with the lowest threshold is collected first, at 9% of pay over that threshold.
- Repayments are worked out on pay that counts for National Insurance, so salary sacrifice lowers them.
Student loan repayment: £42 per month (2026/27)
Show the breakdown
| Line | Per month | Year |
|---|---|---|
| Earnings | £2,917 | £35,000 |
| Plan 2: 9% over £2,448.75 a month | £42 | £504 |
| Total repayments | £42 | £504 |
Which plan are you on?
You don’t choose your plan: it depends on where you lived when you applied and when your course started.GOV.UK
| Plan | Who | Yearly threshold | Monthly threshold | Weekly threshold |
|---|---|---|---|---|
| Plan 1 | England or Wales, course started before 1 September 2012; anyone who borrowed through Student Finance NI | £26,900 | £2,241.66 | £517.30 |
| Plan 2 | England, started 1 September 2012 to 31 July 2023; Wales, started on or after 1 September 2012 | £29,385 | £2,448.75 | £565.09 |
| Plan 4 | Anyone who borrowed through the Student Awards Agency Scotland | £33,795 | £2,816.25 | £649.90 |
| Plan 5 | England, course started on or after 1 August 2023 | £25,000 | £2,083.33 | £480.76 |
| Postgraduate Loan | England or Wales master’s or doctoral loan, started on or after 1 September 2012 | £21,000 | £1,750.00 | £403.84 |
If you’re unsure, your online student loan account shows your plan type. If your payslip shows a different plan from the one in your account, show your employer the letter from the Student Loans Company so payroll can be corrected.
How repayments are worked out
Your employer takes the threshold for your plan, divides it by the number of pay periods in the year (rounding down to the penny), and charges the plan rate on whatever you earn above that in the pay period. The result is rounded down to the whole pound.
The earnings that count are your gross pay before tax, including bonuses and overtime, after any salary sacrifice. They are the same earnings your National Insurance is worked out on.GOV.UK
Because it is worked out per payslip, a single large payment can trigger a repayment even if your yearly pay is below the threshold. A month with a big bonus means a big repayment that month.
Salary sacrifice lowers your repayments, because it reduces the pay they are worked out on. A pension taken under a net pay arrangement or relief at source does not, since those contributions come out of pay that still counts for National Insurance. Benefits in kind, such as a company car, are taxed through your tax code but are not earnings for student loan purposes.
What you owe, and the interest on it, does not change your monthly repayment. It only affects how long you keep repaying and whether the balance is written off before you clear it.
What you repay at common salaries
Yearly repayments for 2026/27, paid monthly, with no Postgraduate Loan:
| Salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 |
|---|---|---|---|---|
| £25,000 | £0 | £0 | £0 | £0 |
| £30,000 | £276 | £48 | £0 | £444 |
| £35,000 | £720 | £504 | £108 | £900 |
| £40,000 | £1,176 | £948 | £552 | £1,344 |
| £50,000 | £2,076 | £1,848 | £1,452 | £2,244 |
| £60,000 | £2,976 | £2,748 | £2,352 | £3,144 |
The pattern is simple: once you are over every threshold, each extra pound of pay costs the same on any plan, so the gap between plans stays fixed. What changes is where you start paying. A Plan 5 graduate on £30,000 repays £37 a month, while a Plan 4 graduate in Scotland on the same salary repays £0.
| Line | Per month | Year |
|---|---|---|
| Earnings | £3,333 | £40,000 |
| Plan 5: 9% over £2,083.33 a month | £112 | £1,344 |
| Total repayments | £112 | £1,344 |
Postgraduate Loans
A Postgraduate Loan for a master’s or doctorate is repaid at 6% of pay above £21,000 a year. It runs alongside an undergraduate plan rather than instead of it, so if you have both, you make two repayments from the same payslip.
On £40,000, a Postgraduate Loan on its own costs £1,140 a year. With a Plan 2 loan as well, the total is £2,088: £948 to Plan 2 and £1,140 to the Postgraduate Loan.
More than one plan
Some people have loans on two undergraduate plans, for example a Plan 1 loan from a first degree and a Plan 2 loan from a second course. You repay 9% of your income over the lowest of your thresholds, not a separate amount for each plan. Your employer only operates one undergraduate plan through payroll, and the Student Loans Company shares the money between your loans.
If you are self-employed
If you work for yourself, there is no payroll to take repayments. HMRC works out what you owe from your Self Assessment tax return, using your income for the whole year, and you pay it with your tax bill.
On a Plan 2 loan with £40,000 of income for the year, the yearly calculation gives £955. An employee on the same pay, paid monthly, repays £948 because each payslip is rounded down separately. The self-employed tax calculator adds the student loan to your Income Tax and National Insurance so you know how much to set aside, and the self-employed tax guide explains the rest of the bill.
If you have a job and self-employment, your employer still takes repayments from your wages, and Self Assessment works out any extra due on your total income.
What it does to your take-home pay
A student loan repayment comes out of your pay after Income Tax and National Insurance have been worked out, but it is calculated on your gross pay. On £40,000 in England, paid monthly, take-home pay is £2,693 with no loan, £2,614 on Plan 2 and £2,581 on Plan 5.
Above the higher-rate threshold, a graduate on an undergraduate plan pays Income Tax at 40%, National Insurance at 2% and a repayment at 9% on each extra pound. Salary sacrifice into a pension lowers all three, because it reduces the pay they are worked out on. The salary after tax guide shows take-home pay with each plan at more salaries.
When repayments stop
Repayments end in one of three ways: you pay off the balance, the loan reaches its write-off date, or it is cancelled.GOV.UK
- Write-off. Plan 2 and Plan 5 loans, and Postgraduate Loans for students from England or Wales, are written off a set number of years after the April you were first due to repay. For Plan 1 and Plan 4, the rule depends on when your first loan was paid, and some older loans are written off at a set age instead.
- Cancellation. The Student Loans Company cancels a loan when the borrower dies, and may cancel it if you claim certain disability benefits because of illness or disability.
- Paying it off. You can make extra repayments at any time through your online account, by card or by bank transfer.GOV.UK
Whether extra repayments make sense depends on whether you expect to clear the loan before it is written off. If you are unlikely to, paying more now may simply reduce what would have been cancelled later. That is a judgement about your future pay, so it is worth modelling before you commit spare cash.
Things worth checking
- The plan on your payslip. Plan 5 started being collected in April 2026, so check that a recent graduate’s payslip shows Plan 5 and not Plan 2.
- A Postgraduate Loan. If you have one, you should see two separate student loan deductions.
- Repayments after you have finished. If you think you have paid off your loan, check your online account and tell your employer to stop deductions. You can apply for a refund of any overpayment.GOV.UK
- Moving abroad. Repayments don’t stop if you leave the UK; you repay the Student Loans Company directly instead.GOV.UK
For how student loans fit with tax, National Insurance and pensions, see the UK take-home pay guide, or put your own figures into the take-home pay calculator.
Figures on this page are calculated from the 2026/27 thresholds in HMRC’s student loan payroll specification. They are estimates, not financial advice.
