UK Student Loan Repayments 2026–27: Plans, Thresholds and Tax

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 →

Use the calculator for an annual repayment estimate

Choose the nation whose Income Tax rules apply, enter annual employment income and any self-employment profit in their matching fields, then select the loan plan confirmed by your Student Loans Company account. Tick the separate postgraduate option only when it applies. Loan-plan selection follows your borrowing history, not simply where you currently live.

The tool applies the annual threshold to employment income plus self-employment profit, using 9% for the selected undergraduate plan and an additional 6% for a postgraduate loan. Pension entries and other Income Tax deductions do not reduce this modeled loan-income base. It does not reproduce each payroll period, combine multiple undergraduate plans, use overseas earnings thresholds, read your outstanding loan balance or reconcile repayments already collected.

• ✓ Confirm the tax year is 2026–27
• ✓ Enter annual employment income and business profit once
• ✓ Select one undergraduate plan and the postgraduate option if applicable
• ✓ Press Calculate estimate and inspect the student-loan line
• ✓ Compare with actual payroll and SLC records separately

Related: Pension tax relief explained →

Worked example: Plan 2 and a postgraduate loan together

Assume £35,000 of annual employment income, no self-employment income, no other income or deductions, and both loans still in repayment. The Plan 2 component is (£35,000 − £29,385) × 9% = £505.35. The postgraduate component is (£35,000 − £21,000) × 6% = £840.

The annual planning total is £1,345.35. Selecting only Plan 2 would omit the £840 postgraduate component. This is annual arithmetic before payroll rounding, not a promise that every payslip or Self Assessment calculation will match.

Example: Plan 2 £505.35 + postgraduate £840 = £1,345.35 of modeled annual repayments at £35,000 of repayment income.

The headline refund does not settle your loan account

ToolsFA includes estimated loan repayments in the take-home breakdown, but its headline refund or amount owing compares PAYE Income Tax already deducted with estimated Income Tax and Class 4 National Insurance. That headline does not subtract the student-loan estimate. There is no field for loan repayments already taken through payroll, so the tool cannot calculate an additional loan balance still due or a loan overpayment refund.

Keep PAYE Income Tax, National Insurance and loan repayments separate. For a Self Assessment filing, use the full HMRC calculation and actual loan-deduction records rather than paying the headline estimate as if it settled every obligation. If payroll deductions seem excessive, check the SLC refund process; a difference from annual calculator arithmetic alone does not establish entitlement to a refund.

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.