How student loan repayments are worked out in 2026-27
Student loan repayments in the UK are a percentage of income over a threshold. The amount you borrowed does not set the repayment. From 6 April 2026 the yearly thresholds on GOV.UK are Plan 1 at £26,900, Plan 2 at £29,385, Plan 4 at £33,795, Plan 5 at £25,000, and a postgraduate loan at £21,000. Plan 1, Plan 2, Plan 4 and Plan 5 take 9 percent of income over the threshold. A postgraduate loan, which covers a master's loan from August 2016 or a doctoral loan from August 2018, takes 6 percent. The thresholds move on 6 April. This page stores the 2026-27 set and does not invent next April's figures.
Employers do not use the yearly number on each payslip. The employer guidance gives the pay-period thresholds that payroll actually subtracts. Plan 1 is £2,241.66 a month or £517.30 a week. Plan 2 is £2,448.75 or £565.09. Plan 4 is £2,816.25 or £649.90. Plan 5 is £2,083.33 or £480.76. A postgraduate loan is £1,750 a month or £403.84 a week. The deduction uses the same gross pay that employer Class 1 National Insurance uses. The Student Loan deduction tables then say to multiply the excess by 9 percent, or 6 percent for a postgraduate loan, and round down to the nearest pound. This page does that, and multiplies the pound amount by twelve or by fifty-two to show a steady year.
The 2026-27 terms and conditions include approximate monthly figures that this rounding reproduces. On Plan 1, income of £30,000 is about £2,500 a month and the repayment is about £23. The excess over £2,241.66, times 9 percent, rounds down to £23. On Plan 5, income of £28,000 is shown as about £2,333 a month and about £22. On a postgraduate loan, £25,000 a month-equivalent of £2,083 gives about £19. A Plan 1 income of £35,000 is shown as about £60 a month. The tests on this calculator lock those examples. They are approximate in the guide because pay periods and rounding move the last pound. They are not a second, softer set of rates.
A postgraduate loan is added to an undergraduate plan. It is not instead of it. The terms give the shape of that stack. Between the postgraduate threshold and the Plan 2 threshold, only the 6 percent is due. Above the Plan 2 threshold you pay 9 percent of the excess over the Plan 2 threshold and 6 percent of the excess over £1,750. You do not pay 15 percent on the same slice. The form's postgraduate box does that addition. The undergraduate dropdown is limited to one plan because two undergraduate plans are not 9 percent twice. The terms say that Plan 1 and Plan 2 together are still only 9 percent of income over the lower threshold, spread across the two loans. How that 9 percent is split between the plans is a matter for the Student Loans Company, and this page does not invent the split.
Which plan you are on is a fact about the course, not a choice that lowers the bill. Plan 1 is the plan for courses that started before 1 September 2012. Plan 2 is the later undergraduate plan for students who started before Plan 5. Plan 4 is the Scottish plan. Plan 5 is for undergraduate and Advanced Learner Loan courses starting on or after 1 August 2023, and the earliest repayments were April 2026. If a worker cannot tell the employer which plan applies, the employer guidance says to use Plan 5 until a student loan start notice arrives, and that default is only for Plan 1, Plan 2 or Plan 4. This page does not default you onto Plan 5. If you do not know, look it up before you trust the number.
Repayments start from the April after you leave the course, or earlier for some part-time and doctoral students. They stop when income falls under the threshold, and a week or a month with a bonus can still produce a deduction. If the whole tax year ends under the yearly threshold, you can ask for the deductions back. Interest is a separate charge. It runs from the first payment to you or to the university, it is compounded, and it depends on RPI and on the plan. The terms say the rate changes. This page does not store an interest percentage, because a stale RPI-linked rate would be a made-up price on the balance. The balance itself never changes the repayment while you are on the income-contingent plan.
What the page also leaves out is worth listing. Overseas income can use a different threshold because living costs differ, and the terms say so. Self-employed borrowers pay through Self Assessment rather than through these payroll tables, on the same percentages of profit over the yearly threshold. Voluntary payments are allowed and are not estimated here. The deduction is taken from gross pay, but it is not tax relief and it is not National Insurance. Put the same salary into the take-home page if you want Income Tax and National Insurance beside this repayment. The figure here is only the loan.