Student Loan Repayments and Your Payslip
By C.G. Handley
If you have a UK student loan and you are employed, repayments are normally taken straight from your pay. Understanding how this works helps you check your payslip and plan your take-home pay.
How repayments work
Student loans are repaid through payroll, based on what you earn rather than what you owe. You only repay when your income is above a threshold, and the amount is a percentage of the income above it. Repayments stop automatically if your income falls below the threshold. Most undergraduate plans take 9% of income above the threshold, while a postgraduate loan takes 6%. Thresholds are updated, so check the current figures on GOV.UK.
Which plan are you on?
The plan depends on where and when you started your course. Common ones are Plan 1, Plan 2, Plan 4 (Scotland), Plan 5 and Postgraduate. Each has its own threshold and write-off period. If you have more than one loan, you may repay them at the same time, so your payslip may show a larger deduction. Your plan type is shown in your Student Loans Company account.
What you will see on your payslip
Look for a line labelled “student loan” or “SL”, usually next to tax and National Insurance. Your payslip should be the same each month if your pay does not change, and larger if you earn more or receive a bonus. See our payslip guide for the rest.
Why a deduction might be wrong
- Your employer has the wrong plan type, so the threshold used is incorrect.
- You have already repaid in full, or your loan has been written off, but deductions continue.
- You started a new job and the employer was not told which plan you are on.
- You have a postgraduate loan and an undergraduate loan, and only one is being taken.
What to do
Check your plan and balance in your online Student Loans Company account. If something looks wrong, contact the Student Loans Company, tell your employer and ask them to check payroll. If you have overpaid, you can usually ask for a refund. Keep your payslips as evidence.
Should you overpay?
Many people do not benefit from paying extra, because repayments are linked to income, and part of a balance may be written off after the repayment period. Whether to overpay depends on your plan, income and balance, so consider independent advice, such as MoneyHelper, before making large voluntary payments.
Budgeting with repayments
Treat the deduction as part of your cost of living. Use your net pay, the figure that reaches your account, as the starting point for any budget.
This article is for general information only and is not financial or legal advice. For personal guidance, speak to a qualified adviser or an organisation such as MoneyHelper, Citizens Advice or ACAS.