Plan 5 Repayment Abroad: SLC Overseas Threshold Bands Explained
Last reviewed: 2026-09-20 · By Student Loan Calculator UK Editorial Team · Reviewed by Student Loan Calculator UK Editorial Team
Quick answer: Plan 5 borrowers living abroad pay 9% of foreign earnings above a country-specific threshold published by GOV.UK. The UK £25,000 threshold moves through six fixed tiers: 1.2x for the USA and Switzerland (£30,000), 1.0x UK-parity for Australia, Canada, New Zealand, Ireland and the Netherlands (£25,000), down to 0.2x for India, Pakistan and Nigeria (£5,000). Submit the Overseas Income Assessment Form annually to avoid the default fixed repayment.
How Plan 5 works when you live outside the UK
PAYE only works while you are paid by a UK employer through HMRC. The moment you start working overseas, the Student Loans Company switches you to the Overseas Income Assessment Form (OIAF) regime. The repayment formula stays the same — 9% above threshold — but two things change:
- The threshold is converted into local currency using GOV.UK's country-tier system, reflecting cost-of-living differences.
- Repayments become fixed monthly GBP instalments rather than fluctuating PAYE deductions — you pay the same amount each month based on your declared annual income.
Plan 5 facts at a glance
- UK threshold (2026-27): £25,000/year
- Repayment rate: 9% of income above local threshold
- Interest: RPI only, with no margin during or after study. First repayments became due in April 2026. — accrues regardless of location
- Write-off: 40 years from the April after course end — clock continues abroad
The GOV.UK country tiers explained
GOV.UK does not publish its methodology, but its 2026-27 Plan 5 table groups every country into one of six fixed tiers, each a set multiple of the £25,000 UK threshold. Plan 5 has its own threshold table, separate from Plan 2, Plan 1, Plan 4 and Postgraduate loans. The same country can sit in the same relative tier across plans, but the pound figure that tier multiplies is different for each plan. Plan 5 also has no upper (interest-banding) threshold; only Plan 2 publishes one.
- 1.2x tier (£30,000): United States, Switzerland.
- 1.0x tier, UK-parity (£25,000): Australia, Canada, New Zealand, Ireland, Netherlands.
- 0.8x tier (£20,000): Germany, France, Spain, Italy, United Arab Emirates, Hong Kong, Japan.
- 0.6x tier (£15,000): Singapore, Portugal.
- 0.4x tier (£10,000): South Africa.
- 0.2x tier (£5,000): India, Pakistan, Nigeria.
The figures below are the confirmed 2026-27 Plan 5 threshold and fixed monthly repayment (charged when SLC has no income data on file) for each country, taken directly from GOV.UK.
1.2x tier: United States, Switzerland
| Country | Annual threshold (GBP) | Annual threshold (local currency) | Fixed monthly repayment if no income form (GBP) |
|---|---|---|---|
| United States | £30,000 | 39,468 USD | £530 |
| Switzerland | £30,000 | 32,928 CHF | £530 |
1.0x tier (UK-parity): Australia, Canada, New Zealand, Ireland, Netherlands
| Country | Annual threshold (GBP) | Annual threshold (local currency) | Fixed monthly repayment if no income form (GBP) |
|---|---|---|---|
| Australia | £25,000 | 51,065 AUD | £442 |
| Canada | £25,000 | 45,997 CAD | £442 |
| New Zealand | £25,000 | 56,380 NZD | £442 |
| Ireland | £25,000 | 29,292 EUR | £442 |
| Netherlands | £25,000 | 29,292 EUR | £442 |
0.8x tier: Germany, France, Spain, Italy, UAE, Hong Kong, Japan
| Country | Annual threshold (GBP) | Annual threshold (local currency) | Fixed monthly repayment if no income form (GBP) |
|---|---|---|---|
| Germany | £20,000 | 23,434 EUR | £354 |
| France | £20,000 | 23,434 EUR | £354 |
| Spain | £20,000 | 23,434 EUR | £354 |
| Italy | £20,000 | 23,434 EUR | £354 |
| United Arab Emirates | £20,000 | 96,634 AED | £354 |
| Hong Kong | £20,000 | 205,132 HKD | £354 |
| Japan | £20,000 | 3,923,877 JPY | £354 |
0.6x tier: Singapore, Portugal
| Country | Annual threshold (GBP) | Annual threshold (local currency) | Fixed monthly repayment if no income form (GBP) |
|---|---|---|---|
| Singapore | £15,000 | 25,822 SGD | £265 |
| Portugal | £15,000 | 17,575 EUR | £265 |
0.4x tier: South Africa
| Country | Annual threshold (GBP) | Annual threshold (local currency) | Fixed monthly repayment if no income form (GBP) |
|---|---|---|---|
| South Africa | £10,000 | 235,888 ZAR | £177 |
0.2x tier: India, Pakistan, Nigeria
| Country | Annual threshold (GBP) | Annual threshold (local currency) | Fixed monthly repayment if no income form (GBP) |
|---|---|---|---|
| India | £5,000 | 570,125 INR | £88 |
| Pakistan | £5,000 | 1,852,538 PKR | £88 |
| Nigeria | £5,000 | 10,060,362 NGN | £88 |
Worked example 1: software engineer in Berlin (0.8x tier)
UK graduate moves to Germany (0.8x tier, Plan 5 threshold £20,000, roughly EUR 23,434 at GOV.UK's published rate) for a job paying €60,000 gross.
- Earnings above threshold: €60,000 − €23,434 = €36,566
- Annual Plan 5 liability: €36,566 × 9% = €3,291
- Converted to GBP: approximately £2,809/year or £234.06/month
SLC sets up a fixed monthly direct debit for approximately £234 GBP for the year. The borrower re-declares income annually via the OIAF.
Worked example 2: teacher in Mumbai (0.2x tier)
UK graduate teaches in India (0.2x tier, Plan 5 threshold £5,000, roughly INR 570,125 at GOV.UK's published rate) for an international school paying ₹1,800,000 gross.
- Earnings above threshold: ₹1,800,000 − ₹570,125 = ₹1,229,875
- Annual Plan 5 liability: ₹1,229,875 × 9% = ₹110,689
- Converted to GBP: approximately £971/year or £80.90/month
The lower 0.2x tier threshold means a higher proportion of earnings is subject to 9%, but the absolute pay level in INR means modest GBP repayments.
Process for setting up overseas Plan 5 repayment
- Notify SLC before you leave the UK — ideally 3 months ahead. Update your address and provide expected start date abroad.
- Complete the Overseas Income Assessment Form (OIAF) within 90 days of starting work overseas. Submit annually thereafter.
- Provide income evidence: foreign tax returns, employer letter on company headed paper, or 3 most recent payslips translated to English if not already.
- SLC applies your country's threshold tier and calculates your annual repayment in GBP.
- Set up payment method: GBP direct debit from a UK account, monthly international transfer, or third-party FX service.
The OIAF penalty: why you must submit it
Failure to submit the Overseas Income Assessment Form means SLC applies the fixed monthly repayment published for your country, regardless of your actual earnings. For the highest tier (USA, Switzerland) this is £530.40/month. Plus SLC can charge a £246 penalty for failure to provide income information.
Currency risk and FX cost considerations
- You bear all FX risk. If GBP strengthens against your local currency, your effective Plan 5 cost rises.
- Bank wire fees add up. A £15-£25 wire fee on a £100/month payment adds 15-25% to your true cost. Use Wise, Revolut, or similar low-cost FX services.
- Maintain a UK bank account if possible. A GBP-denominated direct debit eliminates per-transaction FX fees, though you still need to fund the account in GBP.
Returning to the UK: switching back to PAYE
Notify SLC within 3 months of returning to the UK. Your new UK employer will start deducting Plan 5 through PAYE in the normal way (9% of pay above £2,083/month). Overseas payments already made in the tax year count toward your annual total — no double charging.
Special cases
- Crown servants and HM Forces: Treated as UK-resident for Plan 5 purposes regardless of posting location. PAYE applies normally.
- Self-employment overseas: Declared income is your profit after business expenses, not gross revenue. Keep meticulous records for OIAF evidence.
- Multiple foreign incomes: Sum all foreign earnings on the OIAF. SLC's calculation uses total worldwide income above the country threshold.
Related Plan 5 guides
- Plan 5 student loans: complete guide
- Monthly student loan repayment calculator
- Plan 5 optimisation guide
- Plan 5 for high earners
- Plan 5 + postgraduate loan stacking
Frequently asked questions
Does Plan 5 still apply if I live abroad?
Yes. Plan 5 borrowers remain liable regardless of where they live. The Student Loans Company switches your assessment from UK PAYE to the Overseas Income Assessment Form (OIAF), which uses a country-specific threshold published by GOV.UK, based on the £25,000 UK figure.
How does SLC convert my £25,000 Plan 5 threshold to local currency?
GOV.UK assigns every country a fixed GBP tier, then converts that figure to local currency at its published exchange rate. The USA and Switzerland sit in the highest tier, £30,000; Australia, Canada, New Zealand, Ireland and the Netherlands match the UK figure exactly at £25,000; lower tiers go down to £5,000 for India, Pakistan and Nigeria.
How is my monthly Plan 5 repayment calculated overseas?
SLC calculates: (foreign annual income − country threshold) × 9% ÷ 12. The result is a fixed monthly GBP instalment for the year. Unlike UK PAYE, it does not adjust month-to-month based on individual payslips — it is a stable annual figure.
What happens if I do not complete the Overseas Income Assessment Form?
SLC will charge you the fixed monthly repayment published for your country, regardless of actual income. For the highest tier (USA, Switzerland) this is £530.40/month. Always submit the OIAF annually with supporting income evidence to avoid this default charge.
Do I still accrue Plan 5 interest while abroad?
Yes. RPI interest accrues on the outstanding balance regardless of country of residence. The 40-year write-off clock also continues uninterrupted while you live abroad.
Can I pay Plan 5 in foreign currency?
No. All Plan 5 repayments to SLC must be made in GBP. You can pay by GBP direct debit from a UK bank account, international wire transfer (with conversion fees borne by you), or third-party services like Wise that handle the currency conversion.
What if I move back to the UK partway through the year?
Notify SLC within 3 months of returning. Your repayment switches back to UK PAYE through your new UK employer, who will deduct Plan 5 at 9% of pay above £2,083/month. Any overseas monthly payments you have already made for that tax year count toward your annual total.
Are Plan 5 overseas repayments tax-deductible in my new country?
Generally no. Plan 5 repayments are not considered loan interest or charitable contributions in most countries, so they are not deductible against foreign income tax. Consult a local tax advisor for country-specific guidance.
What happens if I ignore Plan 5 while living abroad?
SLC has powers to pursue arrears internationally and can apply penalty charges (currently £246 for failure to provide income information). Arrears can also affect your credit standing if you return to the UK, and SLC has reciprocal arrangements with some overseas authorities.
Sources: GOV.UK: Overseas earnings thresholds for Plan 1, Plan 2, Plan 4, Plan 5 and postgraduate student loans, 2026-27; Department for Education — Plan 5 loans; Plan 5 repayment terms — gov.uk.