Student loan thresholds for 2026/27
HMRC publishes one threshold per plan for the tax year 6 April 2026 to 5 April 2027. Payroll deducts only on pay above the threshold for the pay period.
| Plan | Per year | Per month | Per week | Rate |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241.66 | £517.30 | 9% |
| Plan 2 | £29,385 | £2,448.75 | £565.09 | 9% |
| Plan 4 (Scotland) | £33,795 | £2,816.25 | £649.90 | 9% |
| Plan 5 | £25,000 | £2,083.33 | £480.76 | 9% |
| Postgraduate Loan | £21,000 | £1,750.00 | £403.84 | 6% |
Source: HMRC's Rates and thresholds for employers 2026 to 2027 and the SL3 deduction tables, read on 8 October 2026. The thresholds change every 6 April. This page is general information, not tax advice.
Plan 5 is new to payroll this year: HMRC's payroll specification lists a Plan 5 threshold for the first time for 2026 to 2027. It covers people from England who started an undergraduate course on or after 1 August 2023.
Which plan is the employee on?
| Plan | Who it covers |
|---|---|
| Plan 1 | England or Wales courses started before 1 September 2012; all Northern Ireland students |
| Plan 2 | England courses started 1 September 2012 to 31 July 2023; Wales courses started on or after 1 September 2012 |
| Plan 4 | All Scottish students, undergraduate or postgraduate |
| Plan 5 | England courses started on or after 1 August 2023 |
| Postgraduate Loan | Master's or doctoral loans in England, and in Wales for courses started on or after 1 September 2012 |
You take the plan from the P45, the starter checklist, an SL1 or PGL1 start notice from HMRC, or a generic notification reminder. If a new employee says they have a loan but doesn't know the plan, GOV.UK says to use Plan 5 until an SL1 arrives (this default only applies to Plan 1, 2 or 4 loans). If they have more than one plan, start with the one with the lowest threshold until the SL1 tells you which to use.
How payroll works out the deduction
- Take the pay you use for employer Class 1 National Insurance this pay period (gross pay, after any salary sacrifice).
- Take away the pay period threshold for the plan: the monthly figure for monthly pay, the weekly figure for weekly pay.
- Multiply what is left by 9% (6% for a Postgraduate Loan).
- Round down to the whole pound. That is the deduction.
Each payday stands on its own. HMRC's Collection of Student Loans Manual says the deductions are non-cumulative and worked out on the current pay period only. A month with pay under the threshold has no deduction, and nothing is caught up later: GOV.UK tells employers not to make deductions in arrears.
For pay every two or four weeks, the SL3 tables say to split the pay into equal weekly amounts, work out the deduction for one week, then multiply by the number of weeks.
Worked example: £3,000 a month on each plan
An employee paid £3,000 gross in a month in 2026/27, with no salary sacrifice:
| Plan | Pay above threshold | × rate | Deduction |
|---|---|---|---|
| Plan 1 | £3,000 − £2,241.66 = £758.34 | × 9% = £68.25 | £68 |
| Plan 2 | £3,000 − £2,448.75 = £551.25 | × 9% = £49.61 | £49 |
| Plan 4 | £3,000 − £2,816.25 = £183.75 | × 9% = £16.54 | £16 |
| Plan 5 | £3,000 − £2,083.33 = £916.67 | × 9% = £82.50 | £82 |
| Postgraduate Loan | £3,000 − £1,750.00 = £1,250.00 | × 6% = £75.00 | £75 |
Weekly pay works the same way with the weekly threshold. HMRC's own SL3 example: £565 in a week on Plan 1 is £47.70 over £517.30, and 9% of that is £4.29, so the deduction is £4.
A student loan and a Postgraduate Loan at the same time
Both are deducted, each on its own threshold and rate. Someone on Plan 2 with a Postgraduate Loan, paid £3,000 in a month, pays £49 (Plan 2) and £75 (Postgraduate Loan): £124 in all, shown as two lines.
Two undergraduate plans are different. Only one plan runs through payroll at a time, so there is one 9% deduction at the threshold the SL1 tells you to use. The Student Loans Company splits that single repayment between the loans.
How student loan deductions show on a payslip
The deduction is its own line under deductions, named by plan, with the year-to-date total beside it. The same whole-pound totals go on the Full Payment Submission and, at year end, on the P60.
| Line | This period | What it shows |
|---|---|---|
| Salary | £3,000.00 | Gross pay |
| Income Tax (PAYE) | From payroll | Worked out on the tax code |
| National Insurance | From payroll | Employee Class 1 |
| Student loan (Plan 2) | £49.00 | 9% above £2,448.75, rounded down |
| Postgraduate loan | £75.00 | 6% above £1,750.00, rounded down |
In the PayDocs payslip generator each loan is its own deduction line, carried into the year-to-date totals and the net pay. PayDocs works out PAYE income tax, National Insurance and supported deductions for 2026/27 pay dates.
Starting, stopping and fixing mistakes
- Start from the next available payday after you get the plan from a P45, starter checklist, SL1, PGL1 or reminder.
- Stop from the first available payday after the stop date on an SL2 or PGL2. GOV.UK says you can't stop because the employee asks you to.
- For a leaver whose deductions should continue, enter Y in box 5 of the P45.
- Over-deducted this tax year: refund it and correct the year-to-date figures. Under-deducted: you can recover it, but each pay period can take back no more than that period's deduction.
- Keep the notices and calculations for at least 3 years after the end of the tax year.
Questions
How much is the student loan deduction in 2026/27?
9% of pay above the plan's threshold for Plans 1, 2, 4 and 5, and 6% above the Postgraduate Loan threshold. Monthly thresholds are £2,241.66, £2,448.75, £2,816.25, £2,083.33 and £1,750. Each deduction is rounded down to the pound.
What is the Plan 5 threshold?
£25,000 a year for 2026/27: £2,083.33 a month or £480.76 a week. Plan 5 covers people from England who started a course on or after 1 August 2023, and appears in HMRC's payroll specification for the first time this tax year.
Why was no student loan taken this month?
Pay for that period was at or below the threshold. Deductions are worked out on each pay period alone, so a low-paid month has no deduction and nothing is added to the next one.
Can I pay a student loan and a Postgraduate Loan at the same time?
Yes. Payroll takes both: 9% above the plan threshold and 6% above £21,000 a year, shown as separate payslip lines. On £3,000 a month with Plan 2 that is £49 plus £75.
Which pay is the deduction worked out on?
The same pay used for employer Class 1 National Insurance: gross pay after any salary sacrifice. Income tax and pension contributions taken under net pay arrangements are not taken off first.
Can an employee ask the employer to stop deductions?
No. GOV.UK says an employer can't stop because the employee asks. Deductions stop from the first payday after the stop date on an SL2 or PGL2 notice from HMRC.
Sources
- HMRC — Rates and thresholds for employers 2026 to 2027: student loan and postgraduate loan
- HMRC — 2026 to 2027 Student and Postgraduate Loan deduction tables (SL3)
- HMRC — Collection of student loans from 6 April 2026 (payroll technical specification)
- HMRC — Collection of Student Loans Manual CSLM10112: do I deduct a fixed amount?
- GOV.UK — Special rules for student loans (employers)
- GOV.UK — Repaying your student loan: which repayment plan you're on
Official sources checked 8 October 2026. This guide explains how pay documents work; it is not tax or legal advice.
