You repay 9% of your income above your plan’s threshold, and nothing if you earn below it. For 2026/27 the annual thresholds are £26,900 (Plan 1), £29,385 (Plan 2), £33,795 (Plan 4, Scotland) and £25,000 (Plan 5). A postgraduate loan is repaid at 6% above £21,000, on top of any undergraduate repayments.
How repayments are worked out
Repayments are based on what you earn, not on how much you owe. Your employer takes the money through payroll, usually alongside income tax and National Insurance, and sends it to HMRC. If your income falls below the threshold, the deduction stops for that pay period.
The formula is simple: (income − threshold) × 9%. Because it is a percentage of the slice above the threshold, a pay rise increases repayments by only 9p in each extra pound.
Student loan repayments are not tax, so they do not change your income tax or NI, but they do reduce your take-home pay. See How to work out your take-home pay from a UK salary for how each deduction fits together.
Thresholds by plan for 2026/27
| Plan | Annual threshold | Rate above threshold |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
Which plan you have depends on where and when you studied and what type of course it was. Your loan statement or Student Loans Company account shows your plan. Check GOV.UK if you are unsure.
Worked example: £40,000 salary
Using the UK take-home pay for an employee in England with no pension:
| Plan | Repayment a year | Take-home a year |
|---|---|---|
| No student loan | £0 | £32,320 |
| Plan 1 | £1,179 | £31,141 |
| Plan 2 | £955 | £31,364 |
| Plan 5 | £1,350 | £30,970 |
| Plan 2 plus postgraduate loan | £2,095 | £30,224 |
You can check Plan 2 by hand: (£40,000 − £29,385) × 9% = £955.35. The postgraduate part is (£40,000 − £21,000) × 6% = £1,140, which added to £955.35 gives £2,095.35.
Notice that Plan 5 costs more than Plan 2 at the same salary, because its threshold is lower. Plan 1 sits in between at this income.
Two loans at once
If you have both an undergraduate loan and a postgraduate loan, repayments for each are taken at the same time. Combined, that means 15% of the income above both thresholds, which can be a noticeable bite. The postgraduate rate applies from £21,000 whatever your undergraduate plan.
What repayments do not tell you
The monthly deduction does not show whether you will clear the loan. Each plan has a time limit after which any remaining balance is written off, and interest is added in the meantime. The details differ by plan, so check GOV.UK or your Student Loans Company statement. Whether to make voluntary overpayments is a personal decision that depends on your plan, balance and other priorities, and is worth checking against official guidance before you act.
Remember that tax and NI are separate deductions: see UK income tax explained: bands, allowance and how it's worked out and National Insurance for employees: what you pay and why.
Note: This is general information, not financial advice. Thresholds and rules can change; check GOV.UK and the Student Loans Company for your plan.
Check your payslip
On a payslip, the student loan line is usually labelled “SL” or “Student loan”. If you are on Plan 1, Plan 2 or Plan 5, the amount should be close to 9% of your pay above the per-period threshold. If a deduction appears when you believe you have repaid your loan, or you have no loan at all, contact your employer’s payroll team and the Student Loans Company promptly so it can be corrected.
Try the calculator
Select your plan, and add the postgraduate loan if you have one, in the UK take-home pay to see the estimated annual repayment and your take-home pay for 2026/27. The tool gives estimates based on a standard tax code.
Open the free UK take-home pay
Frequently asked questions
Do I repay my student loan on the whole of my salary?
No. You repay 9% of the amount above your plan’s threshold only, or 6% above £21,000 for a postgraduate loan.
Is my student loan taken before or after tax?
It is calculated on your pay and collected through payroll, but it does not reduce your income tax or NI. It simply comes off your take-home pay.
Which plan am I on?
It depends on where you studied and when you started. Your Student Loans Company account or loan statement states your plan, and GOV.UK has an explainer.
What if I earn less than the threshold in some months?
Employers usually apply the threshold per pay period, so no repayment is taken in a month where you earn below it. Any adjustments over the year depend on your payroll and HMRC processes.