Student loan repayments 2026/27: Plans 1, 2, 4, 5 and postgraduate
Student loan deductions depend on your repayment plan and earnings, not the size of your outstanding balance. For 2026/27, the thresholds differ substantially between plans.
2026/27 thresholds
| Plan | Annual threshold | Rate above threshold |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan | £21,000 | 6% |
Worked example: Plan 2 at £40,000
On an annualised basis, £40,000 is £10,615 above the Plan 2 annual threshold of £29,385. Nine per cent of that difference is about £955 for a full year. Actual payroll deductions are calculated using pay-period thresholds and are rounded under payroll rules, so individual months can differ.
Having two loan types
You can repay an undergraduate plan and a Postgraduate Loan at the same time. In that situation, the relevant undergraduate rate and the postgraduate rate can both apply above their respective thresholds. Netly Pay lets you model one undergraduate plan plus an optional Postgraduate Loan.
Source and limitations
Do not use the calculator to decide whether to repay a loan early; that depends on interest, future income and personal circumstances. The tool is intended to estimate payroll deductions only.
Bonuses and overtime can trigger a deduction
Payroll compares your earnings with the threshold for the period in which you are paid. That means a bonus or overtime payment can push one month's earnings above your plan threshold even if your income for the whole tax year later finishes below the annual threshold.
The 2026/27 Plan 2 monthly threshold is £2,448. If eligible pay in one month is £3,000, the amount above the threshold is £552. At 9%, the payroll deduction is about £49 for that month (subject to payroll rounding). GOV.UK says you can ask for a refund after the tax year if your annual income was below your plan's yearly threshold.
Which income does Netly Pay use?
The calculator gives an annualised estimate based on the employment income entered after the modelled salary-sacrifice pension. It is designed for comparisons, not to reproduce every payroll period. If your pay varies substantially month to month, compare the estimate with the thresholds and deductions on your actual payslip.