Student Loan Repayment Calculator

You begin repaying Plan 2 loans when your taxable income exceeds £27,295, while Plan 4 graduates start when earnings pass £25,000. These thresholds are set by HMRC and apply from 6 April 2026. Repayments are automatically deducted through your PAYE code once your annual salary crosses these limits.

You repay 9% of your income above the relevant threshold, calculated monthly or weekly by your employer. For example, earning £35,000 on Plan 2 means you pay 9% on the £7,705 above the £27,295 threshold, resulting in roughly £57.79 per month. Your payslip will show this deduction separately from income tax and National Insurance.

No, the VAT threshold increase to £90,000 from April 2026 does not impact student loan calculations. Student loan repayments are based solely on your personal taxable income and the specific plan you are on, not on business turnover or VAT registration status. HMRC treats these as separate compliance obligations with no cross-impact.

Self-employed individuals must report their student loan liability through the Self Assessment tax return, as PAYE cannot deduct it automatically. You calculate the 9% on profits above the threshold and pay it alongside your income tax bill by 31 January. Failure to declare this can lead to penalties from HMRC under the new MTD ITSA rules.

The dividend allowance reduction to £500 in 2026/27 does not alter the income threshold for student loan repayments. Contractors on the dividend track still pay 9% on total income exceeding the threshold, including dividends taxed above the allowance. Your total taxable income for this purpose includes all sources, regardless of the dividend tax rates applied.