Which UK student loan plan am I on, and how much will I repay?

In plain English

Student loan repayments under PAYE work like a separate tax. Your employer deducts 9% (or 6% for Postgraduate) of any earnings above the relevant plan threshold each pay period. The thresholds change each tax year and differ by plan, so the same salary can produce very different deductions depending on which plan you are on.

Repayments are non-cumulative - each pay period stands on its own. If you have a one-off bonus, the deduction in that period will be larger, but PAYE will not refund it later. End-of-year reconciliation handled by HMRC and the Student Loans Company is what catches genuine overpayments across the year.

You can be on more than one plan at a time - for example Plan 2 (undergraduate) plus a Postgraduate loan. When that happens, both deductions are calculated separately and appear as separate lines on your payslip.

Plan numbers reflect the country, year and type of loan you took out, not anything about your current job. Plan 1 generally covers older borrowers in England and Wales (pre-2012) and ongoing borrowers in Northern Ireland. Plan 2 covers the 2012-2023 cohort in England and Wales. Plan 4 is for Scottish borrowers funded by SAAS. Plan 5 is the newer plan for English undergraduates starting on or after 1 August 2023, with a lower threshold but a longer write-off horizon. Postgraduate Loans (PGL) sit alongside any undergraduate plan and use a separate threshold and rate. Knowing which plan applies is the single most useful check when reviewing a payslip - using the wrong plan number can over- or under-collect by hundreds of pounds a year.

Interest behaves differently from the headline deductions. Interest accrues on the SLC balance and is published by the SLC and gov.uk; it does not change the PAYE deduction itself. This means the monthly deduction does not reflect whether your balance is growing or shrinking - only your earnings against the threshold matter for PAYE. For Plan 2 graduates in particular, this distinction often appears confusing on first inspection, because the monthly deduction may look small relative to a balance that is still rising. The reconciliation route through SLC and the annual statement is the right place to look at balance dynamics, not the payslip.

2026/27 thresholds and rates

The figures below appear consistent with the Student Loans Company guidance for 2026/27. Verify current values via gov.uk before relying on them.

Worked example (2026/27 figures)

Jordan earns £36,000 on Plan 2. Income above the threshold: £36,000 − £28,470 = £7,530. Annual deduction: 9% × £7,530 ≈ £677.70, or about £56.50 per month. If Jordan also has a Postgraduate loan, an extra 6% × (£36,000 − £21,000) = £900 per year would be deducted, in a separate line. Total monthly student loan deduction in that scenario: roughly £131.

On Plan 5, the same £36,000 salary produces 9% × (£36,000 − £25,000) = £990 a year, ≈ £82.50 per month - higher than Plan 2 because the threshold is lower. None of these affect income tax or NI; they sit alongside on the payslip.

Multi-scenario worked example

Scenario A - Plan 4 in Scotland, modest salary. Erin earns £34,000 on Plan 4. Excess over the £32,745 threshold = £1,255. Annual deduction at 9% = £112.95, or roughly £9.40 a month. Because Plan 4 has the highest threshold, the deduction looks tiny next to the same salary on Plan 5.

Scenario B - Plan 5 graduate with a bonus. Mo earns £42,000 on Plan 5 and receives a £6,000 bonus in December. The regular monthly deduction is 9% × (£42,000 − £25,000) ÷ 12 = £127.50. In December, gross pay is roughly £9,500 (£3,500 monthly + £6,000 bonus). For that month, the threshold equivalent is £25,000 ÷ 12 = £2,083.33, so the excess is £9,500 − £2,083.33 = £7,416.67. The December deduction is 9% × £7,416.67 ≈ £667.50, much larger than usual. This appears consistent with the non-cumulative basis and does not prove an error.

Scenario C - Plan 2 plus Postgraduate, dual deduction. Aisha earns £52,000 with both a Plan 2 undergraduate loan and a Postgraduate Loan. Plan 2: 9% × (£52,000 − £28,470) = £2,117.70 a year, or £176.48 a month. Postgraduate: 6% × (£52,000 − £21,000) = £1,860 a year, or £155 a month. Combined monthly student loan deduction is approximately £331.48. Two separate lines should appear on the payslip - if one is missing, that may indicate the SLC start notice for the missing plan never reached payroll.

Scenario D - Plan 1 in Northern Ireland, irregular income. Ciaran earns £24,000 on Plan 1 - below the £26,065 threshold - but takes irregular project bonuses. Most months: zero deduction. In a £6,000-bonus month, gross is roughly £8,000; period threshold = £26,065 ÷ 12 = £2,172.08; excess = £5,827.92; deduction = 9% × £5,827.92 ≈ £524.51. Annual earnings still sit below the threshold, but PAYE will not auto-refund - Ciaran would need to apply via the SLC for any over-collection at year end, based on guidance from the SLC.

Common mistakes people make

• Confusing the threshold with the personal allowance - they are unrelated.
• Assuming repayments stop the moment income drops below the threshold for one month - they do, per period.
• Believing overpayments self-refund through PAYE - they typically need an SLC reconciliation.
• Not telling a new employer about the plan, leading to no deduction or an emergency Plan 1 default.
• Forgetting that voluntary overpayments are possible and may save interest depending on plan terms.
• Assuming Postgraduate replaces an undergraduate plan - it sits alongside it.
• Mixing up Plan 4 (Scotland) with Plan 2 because they look similar in the year of issue - the funding body (SLC vs SAAS) is the giveaway.
• Asking payroll to stop deductions when the SLC has not issued an SL2/PGL2 stop notice - payroll cannot act unilaterally.
• Treating the payslip deduction as the full picture - interest, balance and write-off horizon all live with the SLC.
• Forgetting to update the SLC when moving to or from Scotland, which may indicate the wrong plan continuing for several pay periods.

When this might apply to you

1. You started a job and your starter declaration mentioned a student loan.
2. You completed a Masters and are now on PAYE with a postgraduate loan.
3. You moved to or from Scotland (Plan 4) and the plan should change.
4. You graduated in 2024 and Plan 5 should apply.
5. You took a bonus and noticed the deduction spike.
6. You started a second job and want to confirm whether deductions should apply across both employments.
7. You returned to PAYE after a period of self-employment and the loan deduction has reappeared.
8. You are approaching the write-off date for your plan and want to check what happens to the deduction in the final tax year.

What to do step by step

1. Confirm your plan via the Student Loans Company portal.
2. Check the deduction line on your payslip - the plan number is usually shown.
3. Compare the figure to 9% (or 6% for Postgraduate) of the earnings above the threshold for that pay period.
4. If the wrong plan is in use, ask payroll to update it; HMRC also issues SL1/PGL1 start notices.
5. Check your annual statement from the SLC for end-of-year reconciliation.
6. Decide whether voluntary overpayments make sense - they are penalty-free but irreversible.
7. Use our payslip check to verify the figures appear consistent.

When to contact HMRC, payroll, or a professional

Payroll is the right contact for plan-number errors. HMRC can re-issue an SL1/PGL1. The Student Loans Company handles balance enquiries and overpayment refunds. A tax adviser may help with high-bonus or two-loan scenarios where year-end reconciliation is significant, particularly where the year-end figure could indicate eligibility for a refund based on the figures provided. MoneyHelper and Citizens Advice can help with general repayment queries.

Frequently asked questions

Related guides and tools

• Payslip line by line
• Tax codes explained
• PAYE: cumulative vs non-cumulative
• NI categories
• Student loan calculator
• Take-home pay calculator
• Run a free payslip check

Educational content only; not regulated tax advice.