Student Loan Repayment Percentage Calculator

Determine the percentage and amount of your student loan repayments based on UK salary and plan.

What is the Percentage Used to Calculate Student Loan Repayments?

The percentage used to calculate student loan repayments in the UK is a fixed rate applied to your income above a certain threshold. For most undergraduate loans, this rate is 9%, while for Postgraduate Loans, it is 6%. It’s a common misunderstanding that this percentage applies to your total salary; in reality, it only applies to the portion of your earnings over the specific repayment threshold for your loan plan. This system is known as an ‘income-contingent’ loan.

This calculator helps you understand exactly what your repayments will be by identifying the correct percentage and threshold for your circumstances. Knowing what is the percentage used to calculate student loan repayments is crucial for effective financial planning and budgeting after graduation.

Student Loan Repayment Formula and Explanation

The calculation is straightforward once you know your plan’s threshold and rate. The formula is:

Annual Repayment = (Annual Income – Repayment Threshold) * Repayment Percentage

To get the monthly repayment, this annual figure is simply divided by 12. If your income is below the threshold, you pay nothing.

Variables in Repayment Calculation

Variable	Meaning	Unit	Typical Range
Annual Income	Your gross salary before tax.	Currency (£)	£0 – £150,000+
Repayment Threshold	The income level above which you start repaying.	Currency (£)	£21,000 – £32,745 (for 2025/26)
Repayment Percentage	The fixed rate applied to income over the threshold.	Percentage (%)	6% or 9%

Practical Examples

Example 1: Plan 2 Loan

• Inputs: Annual Income of £35,000, Plan 2 Loan.
• Units: Currency in GBP (£).
• Calculation:
  • The Plan 2 threshold is £28,470.
  • Repayable income: £35,000 – £28,470 = £6,530.
  • Annual Repayment: £6,530 * 9% = £587.70.
• Result: Approx. £48.98 per month.

Example 2: Postgraduate Loan

• Inputs: Annual Income of £28,000, Postgraduate Loan.
• Units: Currency in GBP (£).
• Calculation:
  • The Postgraduate Loan threshold is £21,000.
  • Repayable income: £28,000 – £21,000 = £7,000.
  • Annual Repayment: £7,000 * 6% = £420.
• Result: £35.00 per month.

How to Use This Student Loan Percentage Calculator

Follow these simple steps to determine your repayments:

1. Enter Your Annual Income: Input your total yearly salary before any deductions in the first field.
2. Select Your Loan Plan: Choose the correct student loan plan from the dropdown menu. If you are unsure, check your student loan paperwork or the SLC website. A related tool you might find useful is our student loan interest calculator.
3. Review the Results: The calculator will instantly show your estimated monthly repayment. It also displays the specific threshold and percentage rate being used for the calculation, which directly answers the question of what is the percentage used to calculate student loan repayments for you.
4. Analyze the Chart: The bar chart visualizes how your repayments change at different income levels, giving you a broader perspective.

Key Factors That Affect Repayments

Several factors influence your student loan repayments beyond the simple percentage:

• Your Salary: This is the primary driver. The more you earn above the threshold, the more you repay.
• Your Loan Plan: Each plan (Plan 1, 2, 4, 5, Postgraduate) has a different repayment threshold, which significantly impacts when you start paying and how much.
• Annual Threshold Changes: The government typically adjusts the repayment thresholds each April. An increase in the student loan threshold can lower your monthly payments.
• Bonuses and Overtime: Repayments are calculated on your total income for a pay period, so a bonus can lead to a larger deduction in that month.
• Employment Status: If you are self-employed, you will declare your income via a Self-Assessment tax return, and HMRC will calculate your repayment for the year. Check out our debt-to-income ratio calculator to see how this fits into your larger financial picture.
• Having Multiple Jobs: Repayments are calculated per job. You only repay on jobs that pay you above the threshold.

Frequently Asked Questions (FAQ)

1. What is the percentage used to calculate student loan repayments for most people?

For anyone who attended university in the UK for an undergraduate degree since 1998, the percentage is 9% of income over the relevant threshold.

2. Is the percentage different for postgraduate loans?

Yes. The repayment rate for Postgraduate Master’s and Doctoral Loans is lower, at 6% of income over the postgraduate threshold.

3. Do I pay anything if my income is below the threshold?

No. If your gross income is below the annual threshold for your plan, you are not required to make any repayments.

4. Will the repayment percentage ever change?

While the government can change the rules, the 9% and 6% rates have been stable for many years. The repayment thresholds, however, change more frequently.

5. How does a salary increase affect my repayments?

If your salary increases, your repayments will also increase, as you will be earning more money above the threshold. You can use this student finance calculator to model different scenarios.

6. What happens if I have both an undergraduate and a postgraduate loan?

You repay both simultaneously. You’ll pay 6% on income above the postgraduate threshold AND 9% on income above your undergraduate loan threshold. However, your payslip will show a single combined deduction.

7. Does the interest rate affect my monthly payment?

No. The interest rate affects how quickly your total loan balance grows, but your monthly repayment amount is determined solely by your income and the fixed repayment percentage. You might find our loan overpayment calculator useful for understanding the impact of interest.

8. Are the units (currency) important?

Yes, this calculator is designed for GBP (£) as it is based on the UK student loan system. Using a different currency without conversion would give an incorrect result.

Related Tools and Internal Resources

For more detailed financial planning, explore our other calculators:

• Student Loan Interest Calculator: Understand how interest accumulates on your specific loan plan.
• Debt-to-Income Ratio Calculator: Assess your overall debt in relation to your income.
• Budget Planner: Create a comprehensive monthly budget that includes your student loan repayments.
• Salary Sacrifice Calculator: See how salary sacrifice schemes could affect your student loan repayments.