On Plan 5 you repay 9% of your income above £25,000 a year, which is £2,083 a month or £480 a week before tax. In 2026/27 that means about £37 a month on a £30,000 salary, £112 on £40,000 and £187 on £50,000, taken through payroll alongside tax and National Insurance. Below the threshold you pay nothing, and anything left after 40 years is written off.
Plan 5 applies to students from England who started an undergraduate course on or after 1 August 2023. This guide focuses on what it does to your pay packet. For how Plan 5 works overall, including interest and how it differs from older plans, see Student loan Plan 5 explained.
How Plan 5 deductions are worked out
Your employer compares your gross pay for each pay period with the period threshold: £2,083 a month, £480 a week. You repay 9% of the amount above it, rounded down to the nearest pound. Because it works period by period, a one-off bonus or overtime month can trigger a repayment even if your annual salary is under £25,000. If your yearly income ends up below the threshold, you can ask the Student Loans Company for a refund.
Repayments start in the April after you leave your course, and only once your income is over the threshold. They appear on your payslip as a student loan deduction.
Monthly deductions and take-home pay, 2026/27
These figures are for an employee in England, Wales or Northern Ireland with a 1257L tax code, using 2026/27 Income Tax and National Insurance rates, and no pension contributions. Your take-home pay will be lower if you pay into a workplace pension.
| Salary | Plan 5 a month | Plan 5 a year | Take-home a month |
|---|---|---|---|
| £25,000 | £0 | £0 | £1,793 |
| £28,000 | £22 | £270 | £1,951 |
| £30,000 | £37 | £450 | £2,056 |
| £35,000 | £75 | £900 | £2,318 |
| £40,000 | £112 | £1,350 | £2,581 |
| £50,000 | £187 | £2,250 | £3,106 |
| £60,000 | £262 | £3,150 | £3,518 |
Annual figures are 9% of salary above £25,000; monthly figures are rounded down by payroll. Run your own numbers through our student loan calculator and take-home pay calculator.
Plan 5 vs Plan 2: who pays more?
Plan 5 has a lower threshold than Plan 2 (£25,000 against £29,385 in 2026/27), so at the same salary a Plan 5 graduate pays more each month. The difference is about £33 a month for anyone earning over the Plan 2 threshold.
| Salary | Plan 2 a month | Plan 5 a month |
|---|---|---|
| £30,000 | £4 | £37 |
| £35,000 | £42 | £75 |
| £40,000 | £79 | £112 |
| £50,000 | £154 | £187 |
Plan 5 also lasts longer: it is written off 40 years after the April you were first due to repay, compared with 30 years for Plan 2. In return, Plan 5 interest is set at RPI only (4.1% at the time of writing), while Plan 2 can charge up to RPI plus 3%. See our Plan 2 guide for comparison.
If you also have a Postgraduate Loan
A Postgraduate Loan is repaid separately, at 6% of income above £21,000 a year (£1,750 a month). If you have both, you pay 9% above £25,000 for Plan 5 and 6% above £21,000 for the Postgraduate Loan at the same time, so on £35,000 you would pay about £75 a month for Plan 5 and £70 for the Postgraduate Loan.
Self-employed and other income
If you are self-employed, or have untaxed income such as rental profits or large savings interest over £2,000, repayments are worked out on your Self Assessment tax return and paid with your tax bill. The 9% applies to total income above £25,000, minus anything already repaid through payroll.
Ways to reduce what comes out legally
Plan 5 is based on income, so anything that lowers your gross taxable pay also lowers repayments.
- Salary sacrifice pension contributions reduce your gross pay before student loan is calculated, so they cut tax, National Insurance and Plan 5 repayments. Contributions paid from net pay do not reduce repayments. See how salary sacrifice works
- Salary sacrifice schemes such as cycle to work or electric cars have the same effect
- Check your plan type: if your payslip shows the wrong plan, contact the Student Loans Company and your employer, as you could be overpaying
Should you overpay a Plan 5 loan?
For most Plan 5 borrowers, voluntary overpayments are unlikely to save money, because many will not repay the full balance before it is written off after 40 years. Overpaying mainly makes sense for high earners who are on track to repay in full anyway. Building savings, clearing expensive debt or investing for the long term is usually a better use of spare cash. Our guide to paying off a student loan early explains how to decide. If you want a home for spare money instead, SYM can help you build a daily saving habit from your first payslip.
Frequently asked questions
How much is Plan 5 student loan repayment a month?
What is the Plan 5 repayment threshold for 2026/27?
When does Plan 5 get written off?
Why is my Plan 5 deduction higher than Plan 2 for the same salary?
Do I pay Plan 5 if I earn under £25,000?
- student loan
- Plan 5
- take-home pay
- graduate salary
- student finance England