Graduate repayment guide
UK Student Loan Repayments 2026–27: Plans, Thresholds and Tax
Student-loan deductions are income-contingent. The plan determines the threshold, while undergraduate plans generally use a 9% repayment rate and postgraduate loans use 6%.
8 min read · Educational guidance
Countries covered by this UK guide
England, Scotland, Wales and Northern Ireland
These guides cover taxpayers across the United Kingdom. Scotland has its own Income Tax bands for earnings, pensions and most other non-savings income. England, Wales and Northern Ireland currently use the main UK Income Tax bands. National Insurance is calculated under UK-wide rules, while the correct student-loan plan depends on your loan history.
The 2026–27 thresholds
The annual thresholds are £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4 and £25,000 for Plan 5. Undergraduate repayments are generally 9% of income above the relevant threshold.
The postgraduate threshold is £21,000 and the rate is 6%. A postgraduate repayment can apply at the same time as an undergraduate-plan repayment.
- ✓ Plan 1: £26,900
- ✓ Plan 2: £29,385
- ✓ Plan 4: £33,795
- ✓ Plan 5: £25,000
- ✓ Postgraduate Loan: £21,000
Related: Estimate a UK tax refund →
A worked Plan 2 example
Using an annual planning method, subtract the threshold from repayment income and apply 9% to the remainder. Payroll performs the calculation separately for each pay period, so bonuses and irregular earnings can make the actual annual deduction different.
Example: At £35,000, the amount above the Plan 2 threshold is £5,615. Nine per cent is about £505 for the year before pay-period rounding.
Related: Self Assessment tax bill →
Why the deduction is not Income Tax
Student-loan deductions appear beside tax and National Insurance on a payslip, but they are a separate repayment. Do not add them to PAYE Income Tax deducted when estimating an Income Tax refund.
If you are self-employed, the repayment can be collected through Self Assessment. Check that the correct plan is recorded when employment and Self Assessment income are combined.
Related: Pension tax relief explained →
Frequently asked questions
How do I know my plan?
Check your Student Loans Company account or official correspondence rather than guessing from your age.
Can I repay an undergraduate and postgraduate loan together?
Yes. Both deductions can apply when income exceeds their respective thresholds.
Why does payroll differ from an annual calculator?
Payroll uses each pay period and rounds under PAYE rules; an annual tool provides a planning estimate.
Official sources and important note
General educational information only, not personal tax advice. Confirm your position with HMRC or a qualified UK tax professional.