2025/26 has finally brought changes to plan 2 student loan repayment thresholds, along with changes to plan 1 and plan 4. The same can’t be said for postgraduate loans, with the threshold remaining frozen for another fiscal year.
Let’s take a look at the changes to student loan repayments in 2025/26, and what the monthly deductions will now look like on each plan for a range of different salaries.
Student loan repayment thresholds in 2025/26
The thresholds and repayment rates for each plan in 2025/26 are as follows, comparable to the 2024/25 rate:
| Plan | Annual earnings threshold 2025/26 | Annual earnings threshold 2024/25 | Repayment rate |
|---|---|---|---|
| Plan 1 | £26,065 | £24,990 | 9% |
| Plan 2 | £28,470 | £27,295 | 9% |
| Plan 4 | £32,745 | £31,395 | 9% |
| Postgraduate | £21,000 | £21,000 | 6% |
2025/26 marks a change for those on plan 2 for the first time since the 2021/22 fiscal year – with the threshold now sitting at £28,470 instead of £27,295. That means they’ll join those on plan 1 and plan 4 seeing a little extra in their pockets each month from the start of the new fiscal year.
The postgraduate loan repayment threshold remains frozen at £21,000.
What will the threshold changes look like on a monthly basis?
Plan 1
| Income each year before tax | Approximate monthly repayment 2025/26 | Approximate monthly repayment 2024/25 |
|---|---|---|
| £26,065 | £0 | £8 |
| £28,000 | £14 | £22 |
| £30,000 | £29 | £37 |
| £35,000 | £67 | £75 |
| £40,000 | £104 | £112 |
Plan 2
| Income each year before tax | Approximate monthly repayment 2025/26 | Approximate monthly repayment 2024/25 |
|---|---|---|
| £28,470 | £0 | £9 |
| £30,000 | £11 | £20 |
| £33,000 | £30 | £42 |
| £38,000 | £71 | £80 |
| £45,000 | £124 | £132 |
Plan 4
| Income each year before tax | Approximate monthly repayment 2025/26 | Approximate monthly repayment 2024/25 |
|---|---|---|
| £32,745 | £0 | £10 |
| £35,000 | £17 | £27 |
| £38,000 | £39 | £49 |
| £42,000 | £69 | £79 |
| £47,000 | £107 | £117 |
An employer's role in student loan deductions
Unless your employees make their own payments directly to the Student Loan Company it’s your responsibility as the employer to deduct repayments directly from salaries via PAYE depending on which plan each individual is on (though it’s the employee’s responsibility to liaise with the Student Loans Company).
When you first employ someone, their new starter checklist should accurately outline what student loan plans they have.
You’ll also need to keep a record of all student loan deductions made, pay them to HMRC, provide details within each FPS submission, and outline deductions on payslips and P60s.
What about plan 5 student loans?
Students on plan 5 student loans don’t need to start their repayments until April 2026 at the earliest, even if someone leaves their course early. So, there’s no need to worry about plan 5 deductions right now.
Need a hand with student loan deductions?
Whether you outsource your payroll or run it in-house, Cintra has all the tools to make student loan repayments easier.
All our payroll solutions are up to speed with the latest requirements, so you don’t have to be. Whether you process your payroll in-house or prefer to outsource, our software is up to date with the latest rates and thresholds, so there’s no need to run manual calculations and triple-check your maths.
Automatically calculate 2025/26 student loans repayments and all other deductions with Cintra. Get in touch to see it for yourself!
Payroll Legislation Guide
The facts, figures, thresholds and allowances for 2024/25 spanning tax, National Insurance, pensions, statutory payments and more.
