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Student loan deductions on a £3,000 month: five plan types worked, and why the threshold, not the pay, decides the deduction
Student loan deductions are 9% over the plan threshold, 6% for postgraduate. On £3,000 a month they run from £16.56 to £82.53 depending on the plan.
A recruiter's payroll team places a temp whose start form says "Plan 2". Another temp on identical pay says "Plan 5". Their payslips will not match, and nobody on the desk is sure why. The answer is the threshold, and it is easy to show. This guide works one monthly pay through all five plan types, so you can answer the candidate's question from the page.
The rule on GOV.UK
GOV.UK says "you'll repay a percentage of your income over the income threshold for your type of loan". The percentage is 9% for Plans 1, 2, 4 and 5 and 6% for a postgraduate loan. The thresholds on the page are:
| Plan | Yearly | Monthly | Weekly |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | £517 |
| Plan 2 | £29,385 | £2,448 | £565 |
| Plan 4 | £33,795 | £2,816 | £649 |
| Plan 5 | £25,000 | £2,083 | £480 |
| Postgraduate | £21,000 | £1,750 | £403 |
The page does not say which tax year these figures are for, so confirm them against your payroll software before the first run of the year.
The same pay through each plan
Take £3,000 gross in a monthly pay period.
| Plan | Over the monthly threshold | Rate | Deduction |
|---|---|---|---|
| Plan 5 | £917 | 9% | £82.53 |
| Plan 1 | £759 | 9% | £68.31 |
| Plan 2 | £552 | 9% | £49.68 |
| Plan 4 | £184 | 9% | £16.56 |
| Postgraduate | £1,250 | 6% | £75.00 |
Our arithmetic, before any rounding rules your software applies. The spread between Plan 5 and Plan 4 is £65.97 a month, which is £791.64 over a year of 12 identical payslips.
AI staff and workflows for recruitment agencies. Starting with cv screening and shortlist.See what we would set upPer job, per pay period
The page says repayments are assessed per job: "you'll only make repayments from jobs where you're paid over the threshold for your plan type, not your combined income." For a temp on two short assignments, neither of which reaches the threshold in a given pay period, no deduction is taken from either. Only one repayment is taken each time the person is paid, and the page describes a cap that splits the payment when there is more than one loan. I did not read that cap's wording, so I have not worked a combined case.
Why candidates ask
Temps compare payslips more than permanent staff do, because they work beside each other on the same rate. A difference of £66 a month between two people on the same pay looks like an error by the agency. A one-line explanation, with the plan thresholds in front of the payroll team, turns a complaint into a quick reply and keeps the candidate from leaving.
What to check at onboarding
- Is the plan letter on the start form? Without it the first run cannot apply the right threshold.
- Does the weekly or monthly figure match the pay frequency? A weekly-paid temp uses the weekly column, not one twelfth of the annual.
- Was a postgraduate loan declared as well? It is its own 6% line.
- Has a candidate said the loan is repaid? That is for HMRC's notice to stop the deduction, not a payroll decision.
The same payslip questions arise when the employment intermediary report is filed, and for agency temps nearing the 12-week point.
Overlyft builds AI staff who join your payroll team and read each new starter form, match the plan letter to the right threshold for the pay frequency, and flag the missing or mismatched ones before the run, for a human to approve.
This is general information, not payroll advice. Check GOV.UK and your payroll software before you run pay.
Where this comes from: GOV.UK, "Repaying your student loan: what you pay" (thresholds Plan 1 £26,900 a year, £2,241 a month, £517 a week; Plan 2 £29,385, £2,448, £565; Plan 4 £33,795, £2,816, £649; Plan 5 £25,000, £2,083, £480; postgraduate £21,000, £1,750, £403; 9% and 6% over the threshold; assessed per job). The page did not state the tax year. Read 11 October 2026.
AEO Lookup editorial team
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