Student Loan Repayment Thresholds 2026/27: Plans 1, 2, 4, 5 and Postgraduate

Student loan repayments for 2026/27 are based on your loan plan and your income above that plan's threshold. The rate is usually 9% for undergraduate loans and 6% for Postgraduate Loans, but the threshold differs by plan.

For most employees, deductions come through PAYE and appear on your payslip. If you also complete Self Assessment, HMRC can collect student loan repayments through your tax return too.

Quick Summary

• Plan 1 threshold: £26,900 a year, with repayments at 9% above that level.
• Plan 2 threshold: £29,385 a year, with repayments at 9% above that level.
• Plan 4 threshold: £33,795 a year, with repayments at 9% above that level.
• Plan 5 threshold: £25,000 a year, with repayments at 9% above that level.
• Postgraduate Loan threshold: £21,000 a year, with repayments at 6% above that level.
• If you have an undergraduate loan and a Postgraduate Loan, both repayments can apply at the same time.

Use the PayeTax calculator to see student loan deductions alongside Income Tax, National Insurance, pension inputs, and take-home pay.

Current Student Loan Thresholds

These are the GOV.UK repayment thresholds for the 2026/27 tax year.

Payroll normally looks at each pay period. That means a bonus, overtime, or uneven pay month can trigger a deduction even if your annual salary is close to the threshold.

Which Plan Are You On?

Your plan depends on when and where you studied. You do not choose the plan yourself.

Check your plan through the Student Loans Company account service if you are unsure. Your employer needs the right plan to deduct the right amount.

Plan 2 Examples

Plan 2 is common for English and Welsh graduates who started university from September 2012 to July 2023. For 2026/27, repayments are 9% of income above £29,385.

These examples use annualised arithmetic for clarity. Your payslip can differ slightly because payroll applies the threshold to the pay period and rounds deductions.

Plan 1, Plan 4 and Plan 5

Plan 1 has a lower threshold than Plan 2, so deductions start earlier. On a £40,000 salary, a Plan 1 borrower is £13,100 above the threshold and repays about £1,179 a year. A Plan 2 borrower on the same salary is £10,615 above the threshold and repays about £955.35 a year.

Plan 4 has the highest undergraduate threshold. On a £35,000 salary, a Plan 4 borrower is £1,205 above the threshold and repays about £108.45 a year.

Plan 5 has a lower threshold and a longer write-off period than Plan 2. PAYE deductions for Plan 5 started no earlier than 6 April 2026, and only apply once you are due to repay. On a £30,000 salary, a Plan 5 borrower is £5,000 above the threshold and repays about £450 a year.

Postgraduate Loans

Postgraduate Loans sit on top of undergraduate loans. If you have both, you can repay both from the same salary.

For example, someone earning £50,000 with Plan 2 and a Postgraduate Loan would repay:

That is before considering Income Tax, National Insurance, pension contributions, or any other payroll deductions.

Interest Rates

Repayment thresholds decide how much leaves your payslip. Interest affects the loan balance.

For the period from 1 September 2025 to 31 August 2026, GOV.UK lists:

• Plan 1, Plan 4 and Plan 5 interest at 3.2%.
• Plan 2 interest between 3.2% and 6.2%, depending on income.
• Postgraduate Loan interest at 6.2%.

Interest rates and caps can change, so check GOV.UK or your Student Loans Company account before making overpayment decisions.

Salary Sacrifice and Student Loans

Student loan repayments are usually based on the pay figure used for payroll after salary sacrifice, not simply the headline salary in your contract.

That means pension salary sacrifice can reduce student loan deductions as well as Income Tax and National Insurance. Ordinary pension contributions that are not salary sacrifice may not reduce the student loan calculation in the same way.

Use the calculator to compare your take-home pay before and after pension changes. If your employer offers salary sacrifice, ask payroll how the scheme affects student loanable pay.

Directors and Self Assessment

Employees usually repay through PAYE. Directors, self-employed people, landlords, and others who file Self Assessment may also have student loan repayments calculated through the tax return.

This matters because income outside payroll can affect your final liability. If you are a director taking salary and dividends, use the Director Intelligence tool for a more relevant view, and check the final Self Assessment position before relying on a payslip-only estimate.

Common Payslip Checks

Check three things when student loan deductions look wrong:

1. The plan shown by payroll matches your Student Loans Company account.
2. The deduction is based on that pay period, especially if you had a bonus or overtime.
3. Your employer has applied the relevant HMRC notice, start notice, or stop notice.

If too much has been deducted, speak to your employer first if it is a payroll issue. The Student Loans Company can help where your balance, plan, or stop notice is the problem.

Tools and Next Steps

• Calculate your take-home pay with student loan deductions included.
• Compare director salary and dividends if you run a limited company.
• Read the PayeTax compliance notes for how we handle source-backed calculator updates.
• Check your loan details through your Student Loans Company account.

Frequently Asked Questions

Do I repay student loans before or after tax?

Student loan deductions are taken from pay after Income Tax and National Insurance have been calculated, but the student loan calculation itself is based on your income above the plan threshold.

Does moving to Scotland change my loan plan?

No. Your loan plan follows the loan you took out. Moving for work can change which Income Tax bands apply to your salary, but it does not automatically change Plan 2 into Plan 4 or the other way round.

Can I have more than one student loan deduction?

Yes. A common example is an undergraduate loan plus a Postgraduate Loan. The undergraduate loan uses its own threshold and rate, and the Postgraduate Loan is charged separately at 6% above its threshold.

Should I overpay my student loan?

It depends on your income, balance, interest rate, write-off date, savings position, and risk tolerance. Many borrowers will not repay in full before write-off, so overpaying can be poor value. High earners who are likely to clear the balance may reach a different answer.

Sources

• GOV.UK: Repaying your student loan - what you pay
• GOV.UK: Repaying your student loan - how you repay

This guide is for general information only. It is not financial advice, tax advice, or student-loan advice. Check GOV.UK, the Student Loans Company, HMRC, or a qualified adviser before making decisions about repayments or overpayments.