Short answer: you repay 9% of income above your plan’s threshold (Plans 1/2/4) and 6% above the PG threshold, and if you have both a plan and a PG loan, you repay both at the same time. Employees repay through PAYE; the self-employed settle via Self Assessment and these amounts sit on the same bill as your tax and Class 4 NI (so they can feed into Payments on Account). GOV.UK
Free tool: Want a quick forecast that includes loans?
Download the Excel: Heights Sole Trader Tax & Cashflow Tool (2025/26), type your annual profit/salary and it calculates Plan + PG repayments and a weekly set-aside for your 52-week forecast.
Find your plan in 10 seconds
- Plan 1 — older UK undergrad loans (mostly pre-2012 starters)
- Plan 2 — most English/Welsh undergrad starters since 2012
- Plan 4 — Scottish undergrad loans
- Postgraduate (PG) — Master’s/Doctoral loans (can run alongside any one of Plans 1/2/4)
You repay 9% over your plan threshold and 6% over £21,000 for PG; if you have both, both apply concurrently. GOV.UK
2025/26 thresholds & rates (at a glance)
| Loan type | Annual threshold | Monthly threshold | Rate |
|---|---|---|---|
| Plan 1 | £26,065 | £2,172.08 | 9% |
| Plan 2 | £28,470 | £2,372.50 | 9% |
| Plan 4 (Scotland) | £32,745 | £2,728.75 | 9% |
| Postgraduate (PG) | £21,000 | £1,750.00 | 6% |
Source: HMRC SL3 deduction tables 2025/26 (used by payroll and for manual checks). GOV.UK
Worked examples by plan (self-employed profit £50,000)
Prefer to see your own numbers? Drop them into the Excel and it will show annual + monthly and add a weekly set-aside in your 52-week plan.
Plan 1 — worked example
Threshold £26,065 → repay 9% above this. GOV.UK
| Step | Calculation | Result |
|---|---|---|
| Threshold | £26,065.00 | |
| Excess over threshold | £50,000 − £26,065 | £23,935.00 |
| Annual repayment (9%) | £23,935 × 9% | £2,154.15 |
| Monthly equivalent | £2,154.15 ÷ 12 | £179.51 |
Plan 2 — worked example
Threshold £28,470 → repay 9% above this. GOV.UK
| Step | Calculation | Result |
|---|---|---|
| Threshold | £28,470.00 | |
| Excess over threshold | £50,000 − £28,470 | £21,530.00 |
| Annual repayment (9%) | £21,530 × 9% | £1,937.70 |
| Monthly equivalent | £1,937.70 ÷ 12 | £161.48 |
Plan 4 (Scotland) — worked example
Threshold £32,745 → repay 9% above this. GOV.UK
| Step | Calculation | Result |
|---|---|---|
| Threshold | £32,745.00 | |
| Excess over threshold | £50,000 − £32,745 | £17,255.00 |
| Annual repayment (9%) | £17,255 × 9% | £1,552.95 |
| Monthly equivalent | £1,552.95 ÷ 12 | £129.41 |
Postgraduate (PG) only — worked example
Threshold £21,000 → repay 6% above this. GOV.UK
| Step | Calculation | Result |
|---|---|---|
| Threshold | £21,000.00 | |
| Excess over threshold | £50,000 − £21,000 | £29,000.00 |
| Annual repayment (6%) | £29,000 × 6% | £1,740.00 |
| Monthly equivalent | £1,740.00 ÷ 12 | £145.00 |
Most common combo: Plan 2 + PG (yes, both can apply)
If you have a Plan loan and a PG loan, you repay 9% over your Plan threshold and 6% over £21,000 at the same time. GOV.UK
| Component | Calculation | Result |
|---|---|---|
| Plan 2 portion | (£50,000 − £28,470) × 9% | £1,937.70 |
| PG portion | (£50,000 − £21,000) × 6% | £1,740.00 |
| Total annual | £1,937.70 + £1,740.00 | £3,677.70 |
| Monthly equivalent | £3,677.70 ÷ 12 | £306.48 |
How repayment works (PAYE vs Self Assessment)
- Employees (PAYE): employer deducts when pay exceeds the relevant plan/PG pay-period threshold. GOV.UK
- Self-employed (SA): HMRC calculates 9% (Plan 1/2/4) and 6% (PG) on your Self Assessment income above the thresholds and adds it to your SA bill — which can also feed into Payments on Account (Jan/Jul). GOV.UK
Budgeting so January/July never sting
Use a 52-week cashflow forecast to ring-fence a weekly transfer that covers Income Tax, Class 4 NI, and student loans together. HMRC’s Budget Payment Plan can also drip-feed payments toward the bill through the year. GOV.UK
Keep the admin clean (so the numbers are right)
Doing your own books? Use our DIY Bookkeeping Checklist (UK 2025/26): Minimum You Must Do to Stay Compliant, it pairs neatly with the 52-week cashflow forecast and keeps the figures you feed into Self Assessment tidy.
Related Heights guides
- Sole trader taxes (UK 2025/26): what you actually pay – understand Income Tax + Class 4 and then add loans on top
- 52-week cashflow forecast: how to ring-fence tax money – build the weekly pot so January/July never shock you
- DIY Bookkeeping Checklist (UK 2025/26): Minimum You Must Do to Stay Compliant
Sources (GOV.UK)
- SL3: Student & Postgraduate Loan deduction tables 2025/26 — confirms thresholds and monthly equivalents. GOV.UK
- Repaying your student loan — What you pay — 9% plans, 6% PG, and Plan + PG concurrency. GOV.UK
- Tell HMRC about a student or postgraduate loan in your tax return — how SA computes loan repayments. GOV.UK
- Payments on Account (Self Assessment) — how SA flows through 31 Jan / 31 Jul. GOV.UK
- Pay your Self Assessment bill weekly/monthly — Budget Payment Plan. GOV.UK