Plan 2 £79/month · Plan 5 £112 · Plan 1 £98 · Plan 4 £46 · Postgraduate £94 — 2026/27 thresholds.
ESTIMATE
Illustrative estimates for the 2026/27 tax year (6 April 2026 – 5 April 2027) as of 3 November 2026 — not financial advice. Thresholds from GOV.UK; interest rates for 1 September 2026 – 31 August 2027 from the Student Loans Company. Your payslip may differ by a pound or two because payroll rounds each pay period.
How much student loan do you pay on £40k? £79 a month on Plan 2, £112 on Plan 5, £98 on Plan 1 and £46 on Plan 4 — 9% of everything you earn above your plan’s 2026/27 threshold. A master’s or PhD loan takes another 6% above £21,000: £94 a month.
Student loan on £40,000 at a glance
2026/27 tax year, monthly deductions from gross pay.
£79 Plan 2£112 Plan 5£98 Plan 1£46 Plan 4£94 Postgrad
Student loan repayments on £40,000 by plan (2026/27)
Plan
Threshold
Per year
Per month
Per week
Interest*
Written off
Plan 1
£26,900
£1,176
£98
£22
4.1%
25 yrs
Plan 2
£29,385
£948
£79
£18
5.46%
30 yrs
Plan 4
£33,795
£552
£46
£10
4.1%
30 yrs
Plan 5
£25,000
£1,344
£112
£26
4.1%
40 yrs
Postgraduate Loan
£21,000
£1,128
£94
£21
6.0%
30 yrs
Monthly and weekly figures follow payroll rounding (down to the whole pound each period). *Interest from 1 September 2026 to 31 August 2027 at this income; Plan 2 and Postgraduate rates include the temporary 6% cap. Write-off is counted from the April you were first due to repay.
See your full payslip
Add your student loan plan to the UK take-home pay calculator to see income tax, National Insurance, pension and loan repayments together for 2026/27.
How the £40,000 student loan repayment is worked out
You can check your payslip with three steps. For Plan 2, the 2026/27 threshold is £29,385 a year, or £2,448.75 a month. Monthly pay on £40,000 is £3,333.33, so the amount above the threshold is £884.58. Nine per cent of that is £79.61, and payroll rounds down to the whole pound: £79 a month. Over twelve months that is £948 — a few pounds below the exact annual figure of £955 because of the rounding.
Every plan is repaying. At £40,000 you are above all five thresholds, so each plan takes 9% (6% for the Postgraduate Loan) of the slice above its own threshold. Because the percentage is the same, the difference between plans is fixed by the thresholds alone: Plan 5 always costs £395 a year more than Plan 2 once both are repaying, and Plan 1 costs £224 more than Plan 2. You are still a basic-rate taxpayer, so your combined marginal rate on extra pay with an undergraduate loan is about 37%.
Is your balance going down? Interest vs repayments on £40,000
Repayments and interest are separate: you repay a percentage of income, while interest is charged on the whole balance. On an example balance of £45,000, a Plan 2 graduate on £40,000 is charged about £2,455 of interest this academic year at 5.46%, against repayments of £948 — so the balance still grows by around £1,507. At £40,000 you are on the sloping part of the Plan 2 scale, below the 6% cap that starts at about £44,268.
Plan
Interest rate
Interest on £45,000
Repaid this year
Balance change
Plan 1
4.1%
£1,845
£1,176
+£669
Plan 2
5.46%
£2,455
£948
+£1,507
Plan 4
4.1%
£1,845
£552
+£1,293
Plan 5
4.1%
£1,845
£1,344
+£501
Postgraduate Loan
6.0%
£2,700
£1,128
+£1,572
Gold line = Plan 2 rate actually charged after the course in 2026/27; dashed = the normal RPI + 0–3% scale without the 6% cap.
Take-home pay on £40,000 with a student loan
The deduction matters most when you see it next to your other deductions. With no student loan, a £40,000 salary leaves £32,320 a year after 2026/27 income tax and National Insurance (England, Wales and Northern Ireland, no pension). A Plan 2 loan reduces that to £31,372, and a Plan 5 loan to £30,976. If you also took a Postgraduate Loan, a further £1,128 a year comes off. Full details are on the £40,000 salary after tax page.
Loan
Repaid / year
Take-home / year
Take-home / month
Kept of gross
No student loan
£0
£32,320
£2,693
80.8%
Plan 1
£1,176
£31,144
£2,595
77.9%
Plan 2
£948
£31,372
£2,614
78.4%
Plan 4
£552
£31,768
£2,647
79.4%
Plan 5
£1,344
£30,976
£2,581
77.4%
Plan 2 + Postgraduate
£2,076
£30,244
£2,520
75.6%
Plan 5 + Postgraduate
£2,472
£29,848
£2,487
74.6%
Scottish taxpayers pay different income tax rates — use the take-home pay calculator for Scotland.
Same £40,000 salary, five different deductions — only the threshold and rate differ.
Will you pay it off before it is written off?
This is the question that matters most for overpaying, and it depends on your whole career, not one year. We modelled a graduate who starts repaying in April 2026 with a £45,000 balance on £40,000, with pay rising 3% a year. On Plan 2 the loan is still £75,691 owed when it is written off after 30 years, having repaid £55,675 in total. On Plan 5, with a lower threshold and a 40-year term, it is cleared in about 35 years, after repaying £78,596 in total. This is the typical pattern: Plan 5 makes middle earners repay much more of what they borrowed.
Illustrative: £45,000 balance, salary starting at £40,000 and rising 3% a year, RPI 3% from Sept 2027. Lines stop when the loan is cleared or written off.
A projection, not a forecast: real pay, inflation and future threshold decisions will differ. Plan 2 thresholds are frozen at £29,385 to April 2030 and then assumed to rise 3% a year.
Your marginal rate on £40,000: tax, NI and student loan
The student loan behaves like an extra 9% tax on pay above the threshold (6% more for a Postgraduate Loan), so it changes how much of a pay rise you keep. On £40,000, out of the next £100 you earn:
Check your payslip shows the right plan. Your employer only knows the plan type HMRC or you tell them. If you started an English course after August 2023 but are being charged as Plan 2 (or the other way round), the deductions will be wrong — check the plan in your Student Loans Company online account.
Repayments are based on gross pay. Deductions are calculated on pay before income tax, from each pay period on its own. A one-off bonus month can trigger a deduction even if your annual salary is below the threshold; you can ask the Student Loans Company for a refund after the tax year ends.
Salary sacrifice lowers repayments. Pension contributions made through salary sacrifice reduce the pay your loan is worked out on. Contributions under a “net pay” or “relief at source” scheme do not.
Keep your contact details up to date. The Student Loans Company uses your online account to send annual statements and to switch you to Direct Debit in the final years so you do not over-repay. Out-of-date details are the most common reason refunds are delayed.
FAQ
How much student loan do I pay on £40,000 a year?
In 2026/27 a £40,000 salary means monthly repayments of £98 on Plan 1, £79 on Plan 2, £46 on Plan 4 and £112 on Plan 5, plus £94 on a Postgraduate Loan if you have one. That is 9% (6% for the Postgraduate Loan) of income above each plan’s threshold.
What is my take-home pay on £40,000 with a Plan 2 student loan?
After income tax, National Insurance and Plan 2 repayments you take home about £31,372 a year, or £2,614 a month, in England, Wales or Northern Ireland in 2026/27 (no pension). Without a student loan it would be £32,320 a year.
What interest is charged on a Plan 2 loan at £40,000?
From 1 September 2026 to 31 August 2027 Plan 2 interest after you leave your course is 5.46% at an income of £40,000: RPI of 4.1% up to £29,385 of income, rising towards RPI + 3% at £52,885, but capped at 6% for this academic year.
Will my student loan be written off on £40,000?
In our illustration a £45,000 balance, with pay starting at £40,000 and rising 3% a year, would be written off after 30 years on Plan 2 with about £75,691 left and cleared in about 35 years on Plan 5. Your outcome depends on your real balance and future pay.
Does the amount I borrowed change my monthly repayment?
No. Repayments depend only on your income and plan threshold. A larger balance only changes how long you keep paying and whether anything is left to be written off.
GOV.UK, Repaying your student loan – what you pay: 2026/27 thresholds Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000, Postgraduate Loan £21,000; 9% (6% for PGL) of income above the threshold; rules for more than one plan (read 3 November 2026).
Student Loans Company / Department for Education, Student loans interest rates and repayment threshold announcement, 10 August 2026: RPI 4.1%; Plan 1 4.1%; Plan 2 4.1%–7.1% capped at 6%; Plan 3 (Postgraduate) capped at 6%; Plan 5 4.1% (1 Sep 2026 – 31 Aug 2027); Plan 1 threshold £28,005 from 6 April 2027.
Department for Education press release, Interest rate cap introduced to protect Plan 2 borrowers, 7 April 2026, and written ministerial statement of 13 April 2026: 6% cap for 2026/27; Plan 2 upper interest threshold £52,885 from 6 April 2026.
Autumn Budget 2025 (26 November 2025): Plan 2 repayment threshold frozen at £29,385 for 2027/28 to 2029/30 (reported by Which?, 5 December 2025).
Take-home pay: HMRC 2026/27 income tax and National Insurance for England, Wales and Northern Ireland (personal allowance £12,570, 8%/2% employee NI), as used on our UK salary after tax pages.