Student loan repayment is the amount deducted from pay, or paid directly to the Student Loans Company, when your income is above the repayment threshold for your loan plan.
How student loan repayment works
If you are employed, student loan repayments are usually taken through payroll when your earnings are above the threshold for your plan. The deduction is separate from PAYE Income Tax and National Insurance.
Student loan repayments are calculated on earnings above the relevant threshold, not on your whole salary. If your earnings are below the threshold for the pay period, no repayment is usually taken for that period.
student loan repayment = (earnings above threshold) × repayment rate
Student loan repayment plans
Your repayment threshold depends on your plan. The plan can depend on when and where you studied, and whether the loan is undergraduate or postgraduate.
Annual threshold from April 2026.
Annual threshold from April 2026.
Annual threshold from April 2026.
| Plan | 2026/27 annual threshold | Repayment rate above threshold |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan | £21,000 | 6% |
Student loan repayment through payroll
Employers normally start student loan deductions when instructed by HMRC or when starter information shows that a loan should be repaid. The deduction appears on the payslip as a separate line.
Since the deduction is taken through payroll, it reduces your net pay. It is normally shown separately from tax, National Insurance and pension contributions.
If your plan threshold for the pay period is £2,000 and your earnings for that period are £2,500, the repayment is calculated only on the £500 above the threshold.
Student loan vs tax and National Insurance
Student loan repayments are separate from Income Tax and National Insurance. All three can appear on a payslip, but each is calculated under different rules.
PAYE and NI
Payroll deductions for tax and National Insurance, based on income tax rules and NI thresholds.
Student loan
A repayment towards your student loan balance, based on loan plan and income above the plan threshold.
See the full payslip effect
Use the take-home pay calculator to include tax, NI, pension and student loan deductions together.
What if you have more than one student loan?
Some people have more than one loan type. Payroll rules can be specific about which undergraduate loan plan is operated, and a postgraduate loan can be collected alongside an undergraduate plan.
If your payslip shows unexpected deductions, check your Student Loans Company account, HMRC records and payroll information.
Why student loan repayment matters
Student loan repayment matters because it can noticeably reduce take-home pay once your income is above the threshold. It can also increase when salary, bonus, overtime or commission rises.
- Take-home pay: repayments reduce net pay when deducted through payroll.
- Pay rises: higher earnings can increase student loan deductions.
- Bonuses: a bonus month can trigger or increase repayment for that period.
- Plan type: each plan has a different threshold.
- Budgeting: always include student loan deductions when comparing salaries.
Calculate take-home pay with student loan repayment
The take-home pay calculator lets you include Plan 1, Plan 2, Plan 4, Plan 5 and postgraduate loan deductions alongside PAYE, NI and pension contributions.
Estimate student loan deductions
Compare salary after tax, NI, pension and student loan repayments.
Student loan repayment FAQs
What is student loan repayment?
It is money deducted from earnings, or paid directly, once income is above the repayment threshold for your plan.
How much do I repay?
Plans 1, 2, 4 and 5 usually repay 9% above the plan threshold. Postgraduate Loans usually repay 6% above the postgraduate threshold.
Does student loan repayment come off before tax?
It is a separate payroll deduction. It does not replace Income Tax or National Insurance.
Why did my student loan repayment change?
Common reasons include a pay rise, bonus, overtime, commission, plan threshold change or payroll correction.