Student Loan Repayments: Everything You Need to Know
Student loan repayments will start once you earn more than the thresholds that are set by the Student Loan Company which are: £336 a week | £1,457 a month | £17,945 a year
Employees that exceed these thresholds will pay 9% off their student loan. To be clear, it is not 9% of the total wage, it is 9% off anything over the threshold. The example below will help to explain the repayment method:
£1,660 (Monthly Wage) – £1,457 (Threshold) = £203 (Difference between wage and threshold) 9% (percent of deduction of wages) of £203 = £18.27 (Deduction off monthly wage).
Example student payment amounts
|Income each year before tax||Monthly salary||Monthly repayment|
|Up to £17,495||£1,457||£0|
As wages are increased, the student loan repayments will follow accordingly, the more you earn, the more of the student loan you will pay back. Student loan deductions are made in exactly the same timeframe you are paid. For example, if you are paid weekly, student loan repayments will also be paid weekly; if you are paid monthly, student loan repayments will also be deducted monthly.
Once you have graduated and you’re now in the big bad working world, it will come the time when you will start having to pay back your loans. Your current employer will deduct any repayments from your pay. Similar to tax deductions, student loan repayments will automatically be deducted from your wages. Student loan deduction will be only be shown on HMRC PAYE slip, it will not be shown on your payslip from your employer.