Guide
Student Loan Deductions on Your Payslip: 2026/27
Start with the plan and pay period behind the deduction. A larger repayment after a bonus does not by itself mean payroll has made a mistake.
Quick answer
Payroll deducts a percentage of earnings above your plan’s threshold for that pay period. A postgraduate deduction can apply alongside an undergraduate loan. Check your active plan letter before comparing the payslip with an estimate.
On this page
Which repayment plan should I use?
You cannot choose a cheaper plan. Your student finance provider, course type and start date determine it. Sign in to your repayment account and download the active plan type letter; show it to payroll if their plan differs.
Moving to Scotland does not by itself change your loan to Plan 4. Scottish Income Tax and student finance plans are separate. Follow the official plan checker rather than selecting a plan from your current address.
2026/27 repayment 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 | £21,000 | 6% |
The percentage applies to earnings above the threshold, not your whole salary or outstanding loan balance. Payroll uses the threshold for your pay frequency and rounds the deduction down to whole pounds.
Worked monthly example: Plan 2 and a postgraduate loan
Assume £3,000 monthly earnings for student-loan purposes in 2026/27, with no adjustment to those earnings. The Plan 2 monthly threshold is £29,385 ÷ 12 = £2,448.75. The repayment is (£3,000 − £2,448.75) × 9% = £49.6125, rounded down to £49.
If a postgraduate loan also applies, (£3,000 − £1,750) × 6% adds £75. The combined monthly deduction is £124. This example calculates loan deductions only; Income Tax, NI and pension are separate.
A salary calculator using annual thresholds and dividing by 12 may show a slightly different monthly average. Use the payslip’s actual pay period when investigating a payroll deduction.
Why a bonus can trigger a repayment
Bonus and overtime pay can push one payment above the weekly or monthly threshold, even when your usual pay is below it. Payroll does not wait until the tax year ends to find out your annual total.
If your income for the whole tax year ends up below the relevant annual threshold, check the SLC refund guidance. That check takes place after the tax year has ended and income has been confirmed. A deduction in a bonus month is not automatically refundable.
Multiple loans and more than one job
For multiple undergraduate plans, the deduction uses 9% above the lowest applicable threshold; you do not add a separate 9% deduction for every plan. A postgraduate loan can add its own 6% deduction.
For ordinary separate employments, each employer applies the threshold to pay from that job. Self Assessment can reconcile repayments against combined annual income, so the payroll deductions alone may not settle the final annual position.
Pensions and salary sacrifice
HMRC bases payroll loan deductions on the earnings used for employer Class 1 NI. A net pay pension deduction reduces taxable pay but does not by itself reduce those earnings. A qualifying salary-sacrifice arrangement can reduce them.
Ask payroll for the earnings figure behind the loan line. A smaller deduction improves current cash flow, but is not necessarily a lifetime saving if you will repay the loan in full.
Who can correct the deduction or refund an overpayment?
Ask payroll about an incorrect plan or earnings figure. Give them your active plan letter and identify the payday and deduction you want explained. If the loan is repaid, payroll normally needs the official stop instruction; your balance screenshot does not replace that notice.
SLC handles refund requests for repayments taken too early, under the wrong plan or beyond the balance, subject to its rules. For an annual-income refund, use the repayment account after the year ends. For other refund reasons, follow the SLC contact route on GOV.UK. Voluntary extra repayments are not refundable under these rules.
A useful payroll question is: “Which plan and pay-period threshold did you use, and what earnings amount produced this deduction?” Keep personal identifiers out of public posts and calculator feedback.
What to check
- Use the actual repayment plan, pay frequency and tax year shown in your records.
- Compare the earnings used for student loans, including any bonus or overtime.
- Check whether a separate postgraduate deduction also applies.
What to do next
- Download your active plan type letter from your student loan repayment account.
- Ask payroll which plan, earnings and pay-period threshold they used.
- Follow the official refund route if the full records show an overpayment.
Try the tool
Check your payslip or model a change.
Use the checker if you already have a payslip. Use the calculator if you want to model take-home pay or salary-sacrifice changes before payday.
About this guide
Published by IsMyPayRight to help you understand pay and deductions. Guides use official reference material and practical examples, with AI assistance in content preparation.
This is general guidance, not a professional review of your circumstances. Read our editorial process and corrections information.
Methodology and sources
See how the calculations work, which sources they use, how results are tested, and which payroll details the estimates cannot verify.
Official sources
Official sources
Use these references to check the rules behind this guide. Check the tax year and your circumstances before applying an example to your own pay.