Student loan and postgraduate loan thresholds and rates for 2026/27 — what employers must deduct

HMRC has published the student loan and postgraduate loan repayment thresholds for the 2026/27 tax year, applying from 6 April 2026 to 5 April 2027. If you run payroll, here is what you need to deduct and when.

The 2026/27 thresholds and rates

Deductions are 9% of pay above the threshold for student loans (Plans 1, 2, 4 and 5), and 6% of pay above the threshold for postgraduate loans:

• Plan 1: £26,900 a year (£2,241.66 a month / £517.30 a week)
• Plan 2: £29,385 a year (£2,448.75 a month / £565.09 a week)
• Plan 4: £33,795 a year (£2,816.25 a month / £649.90 a week)
• Plan 5: £25,000 a year (£2,083.33 a month / £480.76 a week)
• Postgraduate loan: £21,000 a year (£1,750 a month / £403.84 a week), deducted at 6%

How employer deductions work

You only start deducting when HMRC sends you a start notice (form SL1), or the employee’s starter checklist or P45 shows a plan type. Your payroll software then applies the threshold for each pay period — weekly, monthly or annually, depending on pay frequency. If an employee has both a student loan plan and a postgraduate loan, you deduct both at the same time: the 9% and the 6% can run side by side. You stop only when HMRC sends a stop notice (form SL2) — never stop just because the employee asks you to. Report the deductions on your Full Payment Submission each payday and pay them over to HMRC with your PAYE. Missing deductions can leave you liable for the amounts plus interest and penalties, so keep start and stop notices on file.

What changed vs 2025/26

The deduction rates are unchanged (9% and 6%), and the postgraduate loan threshold is unchanged at £21,000. The plan thresholds have risen: Plan 1 from £26,065 to £26,900, Plan 2 from £28,470 to £29,385, and Plan 4 from £32,745 to £33,795. Plan 5 (£25,000) appears in the 2026/27 tables for the first post-2023 borrowers entering repayment. Practical tip: update your payroll software’s thresholds before the first April payroll run, and double-check anyone who started repaying mid-year — thresholds apply per pay period, not cumulatively.

Source: GOV.UK, ‘Rates and thresholds for employers 2026 to 2027’.