Your student loan plan depends on where you lived when you applied and when your course started: Plan 1, Plan 2, Plan 4 or Plan 5 for undergraduate loans, plus a separate Postgraduate Loan plan for English and Welsh master’s and doctoral loans. For 2026 to 2027 you repay 9% of income above £26,900 (Plan 1), £29,385 (Plan 2), £33,795 (Plan 4) or £25,000 (Plan 5), and 6% above £21,000 on a Postgraduate Loan.
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This page explains how the plans differ and how the deduction appears on your payslip. If you file a tax return, the separate guide on student loan repayments through Self Assessment covers the return itself.
Which student loan plan am I on?
The plan follows the student finance body that lent to you and the date your course started, not the university you attended. gov.uk sets it out like this:
- Plan 1: English and Welsh students whose course started before 1 September 2012, and all Northern Ireland students, undergraduate or postgraduate.
- Plan 2: English students on undergraduate courses, PGCEs, Advanced Learner Loans and Higher Education Short Course Loans for courses that started between 1 September 2012 and 31 July 2023, and Welsh undergraduate and PGCE students whose course started on or after 1 September 2012.
- Plan 4: all Scottish students, whether they studied an undergraduate or a postgraduate course.
- Plan 5: English students on undergraduate courses, PGCEs, Advanced Learner Loans and Lifelong Learning Entitlement finance for courses that started on or after 1 August 2023.
- Postgraduate Loan: English and Welsh students who took out a loan for a master’s or doctoral course.
Two points often cause confusion. Scottish and Northern Irish postgraduates do not have a separate Postgraduate Loan plan; their postgraduate borrowing sits on Plan 4 or Plan 1. And a graduate can hold more than one plan, for example Plan 2 from a first degree and Plan 5 from a later course, or Plan 2 together with a Postgraduate Loan.
What are the repayment thresholds for 2026 to 2027?
HMRC’s employer guidance gives the thresholds that apply from April 2026. Deductions are worked out against the pay period figure, so a monthly paid employee is measured against the monthly threshold.
| Plan | Who it covers (summary) | Yearly threshold | Monthly | Weekly | Rate |
|---|---|---|---|---|---|
| Plan 1 | England and Wales before September 2012, Northern Ireland | £26,900 | £2,241.66 | £517.30 | 9% |
| Plan 2 | England September 2012 to July 2023, Wales from September 2012 | £29,385 | £2,448.75 | £565.09 | 9% |
| Plan 4 | Scotland | £33,795 | £2,816.25 | £649.90 | 9% |
| Plan 5 | England from August 2023 | £25,000 | £2,083.33 | £480.76 | 9% |
| Postgraduate Loan | English and Welsh master’s and doctoral loans | £21,000 | £1,750 | £403.84 | 6% |
The amount you owe has no effect on what you repay each year. Repayments depend only on income above the threshold. gov.uk defines income as what you earn, including bonuses and overtime, before tax and other deductions.
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How does my employer take repayments?
If you are employed, repayments come out through PAYE alongside tax and National Insurance. HMRC tells employers to use the same gross pay they use for employer’s secondary Class 1 National Insurance, and to deduct 9% of the amount over the plan threshold for the pay period, or 6% for a Postgraduate Loan. The payroll guide to student loan deductions covers the employer side in more detail.
Your employer finds out which plan to use from one of several places: your P45, the starter checklist you complete when you join, your own confirmation, or a start notice from HMRC (SL1 for a student loan, PGL1 for a Postgraduate Loan). When the loan is repaid HMRC sends a stop notice (SL2 or PGL2). HMRC is clear that an employer cannot stop deductions just because the employee asks, and must not make deductions in arrears.
Because each pay period stands on its own, a month with a large bonus can produce a bigger deduction even if your annual pay ends up below the yearly threshold. In that case a refund may be due once the tax year has ended.
What happens if I have more than one plan?
If you hold two or more of Plans 1, 2, 4 and 5, you pay 9% of income above the lowest threshold among your plans. Only one deduction is taken each payday, even though it may be shared across more than one loan. HMRC tells employers to start with the plan that has the lowest threshold until an SL1 start notice says otherwise.
A Postgraduate Loan works differently. It is collected at the same time as any undergraduate plan, at 6% of income above £21,000, on top of 9% above the lowest threshold of your other plans. The guide to Postgraduate Loan repayments works through the combined calculation.
How much would I repay on a typical salary?
Illustration only. Priya started an English undergraduate course in 2019, so she is on Plan 2. In 2026 to 2027 she earns a salary of £36,000 a year, paid evenly each month, with no other income.
- Income above the Plan 2 threshold: £36,000 minus £29,385 is £6,615.
- Repayment at 9%: £6,615 multiplied by 9% is £595.35 for the year, or about £50 a month.
- If Priya had started her course in September 2023 she would be on Plan 5. Income above £25,000 is £11,000, so the repayment would be £990 for the year.
The same salary therefore produces quite different deductions depending on the plan, which is why a wrong plan on the payroll is worth correcting quickly.
How do I check which plan I am on?
gov.uk suggests three steps:
- Sign in to your online student loan repayment account and download your active plan type letter.
- Ask your employer which plan they have you on.
- If the two differ, show the letter to your employer so they can update your payroll record.
Keep your payslips and P60. The guide to P60s, P45s and payslips explains what each document shows. If you have more than one job, repayments are only taken from a job where you are paid over the threshold for your plan, not on your combined income.
When do repayments start and stop?
The earliest you start repaying is the April after you leave your course, and only once your income is over the threshold. If you are still studying, see the guide to tax on students’ part time work; deductions taken before you are due to start repaying can be refunded.
Any balance left is cancelled after a set period, provided you have made the repayments due. For English borrowers the terms and conditions for 2026 to 2027 give 30 years from when repayments are due to start for Plan 2 and the Postgraduate Loan, and 40 years for Plan 5. Plan 1 rules depend on when the loan was taken out, so check your own terms.
Can I get money back if I paid on the wrong plan?
Yes, in several situations. You can ask the Student Loans Company for a refund if your income for a tax year that has ended was below your plan’s threshold, if deductions were taken before you were due to start repaying, if you have paid off the loan and deductions carried on (gov.uk says it can take around 4 weeks for them to stop), or if you are on Plan 2 or Plan 4 and your employer had you on another plan. Extra voluntary repayments cannot be refunded.
HMRC can check a return or payroll, and the accountant’s fees for dealing with it can be insured through tax investigation insurance.
Frequently asked questions
Does the size of my loan change my monthly repayment?
No. gov.uk states that the amount you owe has no impact on how much you repay each year. Repayments are set by your income above the threshold for your plan.
Do self employed people repay through payroll?
No. If you are self employed or file a tax return for another reason, repayments are worked out through Self Assessment. Plan 1, 2 and 4 repayments are 9% of total income above the threshold, with credit given for amounts already deducted by an employer. See being employed and self employed at the same time.
What should my employer do if I do not know my plan?
You can check your plan online and tell them. Until HMRC sends a start notice the employer uses the information it has, and HMRC tells employers to switch to the plan on an SL1 notice from the next available payday.
Is my unearned income counted?
Through payroll, only employment pay is used. If you file a tax return, HMRC also counts items such as self employed profit, property income and unearned income over £2,000 when working out the repayment due for the year.
If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.
Sources
- GOV.UK: Special rules for student loans
- GOV.UK: What you pay
- GOV.UK: Which repayment plan you are on
- GOV.UK: When you start repaying
- GOV.UK: Student loans a guide to terms and conditions 2026 to 2027
- GOV.UK: Getting a refund
- GOV.UK: Tell hmrc about a student loan in your tax return
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 November 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.