Payslip Student Loan Deductions Explained
What every student loan line on your payslip means and how to verify the amount is correct
Key Takeaways
- Your student loan deduction appears in the deductions section of your payslip, typically labelled “Student Loan”, “SL Deduction”, “SL1”, or “SL2”. It shows only this month's deduction, not your total balance.
- The plan code on your payslip determines your repayment threshold: Plan 1 (£26,900/year), Plan 2 (£29,385/year), Plan 4 (£33,795/year), Plan 5 (£25,000/year) for 2026-27.
- Verify your deduction by calculating: (gross monthly pay − monthly threshold) × 9%. The result should match your payslip within a few pence.
- Common errors include wrong plan code, deductions starting before you earn above the threshold, and deductions continuing after your loan is repaid.
- Raise a query with payroll first for simple errors. Contact HMRC on 0300 200 3300 if the plan code at source needs updating.
In this article
Your payslip gives you a direct window into whether your student loan repayments are being handled correctly. Most people glance at the number and move on. But if the plan code is wrong, or the deduction amount does not match what you would expect, you could be overpaying or underpaying — and neither situation sorts itself out automatically.
This guide explains what the student loan line on your payslip actually means, how to verify the amount is correct, what errors look like, and exactly what to do when something is wrong. For broader context on how your payslip connects to your tax code, see our guide on the student loan tax code on your payslip.
Finding Student Loan on Your Payslip
Look in the deductions section of your payslip. This is usually the right-hand column or the lower half of the slip, depending on your employer's payroll format. The student loan deduction sits alongside income tax and National Insurance.
Common labels include: Student Loan, SL Deduction, SL1, SL2, Student Loan Plan 1, or Student Loan Plan 2. Some payroll systems use abbreviated codes. If you see “SL” followed by a number, that number is your plan code — which determines your repayment threshold.
What the deduction line does NOT show
Your payslip deduction shows only the amount taken from your pay this month. It does not show your total outstanding loan balance. It does not show interest accrued. It does not show your year-to-date repayments on your balance. Some payroll systems include a year-to-date (YTD) figure for the current tax year, but this is still not your balance — it is simply the sum of deductions made since April of the current tax year.
To find your actual loan balance, you need to log in to the SLC repayment portal at repayment.slc.co.uk. Your payslip is useful for verifying the deduction is correct, not for tracking how much you still owe. For where to sign in and why the figure you find rarely matches what you have paid, see our guide to checking your student loan balance, and for the payslip side see how your student loan appears on your payslip and tax code.
No student loan line on your payslip?
If you earn above your repayment threshold and see no student loan deduction, your employer may not have received an SL1 start notice from HMRC. This can happen when you start a new job or when HMRC records are out of date. Contact HMRC on 0300 200 3300 to check whether an SL1 has been issued to your employer.
Plan Codes Explained
Your plan code determines your repayment threshold — the income level above which you start repaying. Using the wrong plan code means you repay at the wrong threshold. This is one of the most common and impactful payslip errors, because it directly changes how much is deducted each month.
| Plan | Who it applies to | Annual threshold 2025/26 | Monthly threshold | Rate |
|---|---|---|---|---|
| Plan 1 | Started before September 2012 (England/Wales), or before September 1998 (Northern Ireland) | £26,900 | £2,172 | 9% |
| Plan 2 | Started September 2012 – July 2023 (England/Wales) | £29,385 | £2,448 | 9% |
| Plan 4 | Scotland residents (regardless of graduation year) | £33,795 | £2,616 | 9% |
| Plan 5 | Started August 2023 onwards (England) | £25,000 | £2,083 | 9% |
| PGL (Postgraduate) | Postgraduate Master's or Doctoral Loan borrowers | £21,000 | £1,750 | 6% |
What SL1 and SL2 mean
You may see “SL1” or “SL2” on your payslip. These are HMRC form references, not plan codes. An SL1 is the start notice HMRC sends your employer to begin deductions. An SL2 is the stop notice HMRC sends when your loan is repaid. On your payslip, seeing “SL1” or “SL2” as a label simply means your payroll software uses those HMRC form names as the line description. It does not mean you are on Plan 1 or Plan 2.
To confirm which plan you are on, check your SLC repayment account or any letter from SLC. For a full breakdown of threshold rates across all plans, see our repayment thresholds guide.
Verifying the Deduction Amount
You can verify your student loan deduction in under a minute with your payslip and the monthly threshold for your plan. The formula is straightforward: take your gross monthly pay, subtract your monthly threshold, and multiply by your repayment rate.
The calculation
Deduction = (Gross monthly pay − Monthly threshold) × repayment rate
Use your gross pay (before income tax and National Insurance are deducted). Student loan repayments are calculated on gross income, not take-home pay.
Example: Plan 2 calculation
Gross monthly salary: £3,200
Plan 2 monthly threshold: £2,448 (£29,385 ÷ 12)
Amount above threshold: £3,200 − £2,448 = £752
Expected deduction: £752 × 9% = £67.68
Your payslip should show approximately £67 to £68 for student loan deduction.
Example: Plan 1 and PGL combined
If you have both a Plan 1 undergraduate loan and a Postgraduate Loan, you will see two separate deduction lines on your payslip. Each uses a different threshold and rate.
Example: Plan 1 + PGL calculation
Gross monthly salary: £3,000
Plan 1 monthly threshold: £2,241 (£26,900 ÷ 12)
Plan 1 deduction: (£3,000 − £2,172) × 9% = £828 × 9% = £74.52
PGL monthly threshold: £1,750 (£21,000 ÷ 12)
PGL deduction: (£3,000 − £1,750) × 6% = £1,250 × 6% = £75.00
Total student loan deductions: £149.52
Expected deductions at common salary levels
| Annual salary | Plan 1 monthly | Plan 2 monthly | Plan 4 monthly | Plan 5 monthly |
|---|---|---|---|---|
| £28,000 | £14.20 | £0 | £0 | £22.50 |
| £32,000 | £44.23 | £19.61 | £4.54 | £52.50 |
| £40,000 | £104.23 | £79.61 | £64.54 | £112.50 |
| £55,000 | £216.73 | £192.11 | £177.04 | £225.00 |
Common Payslip Errors
Five errors come up repeatedly. Each one has a clear fix. If you spot any of these on your payslip, act promptly — the longer an error runs, the larger the refund or underpayment to resolve.
Error 1: Wrong plan code
Your payslip shows Plan 1 deductions but you graduated after September 2012 in England or Wales. Plan 1 has a lower threshold (£26,900) than Plan 2 (£29,385), meaning you start repaying at a lower income and deduct more. If your salary falls between the two thresholds, you may be deducted money you do not owe. Contact HMRC on 0300 200 3300 to update the plan code on record.
Error 2: Deducting when below threshold
You see a student loan deduction but your gross income is below your plan threshold. This should not happen. Possible causes include a system error in the payroll software calculating the threshold incorrectly, or a one-off pay event (bonus, overtime) pushing you temporarily above the threshold. Check whether this is a one-month anomaly or ongoing. If ongoing, contact payroll with your plan threshold details.
Error 3: No deduction when above threshold
You earn above your threshold but no deduction appears. This means your employer has not received an SL1 start notice from HMRC. This often happens when you start a new job — HMRC may not have linked your new employer to your student loan record yet. Contact HMRC to check whether an SL1 has been issued. Note that not paying does not mean the debt disappears; HMRC will reconcile it at year end.
Error 4: Wrong deduction amount
The plan code appears correct but the deduction amount does not match your calculation. This sometimes happens when payroll uses an incorrect annual threshold or applies the rate to the wrong income figure. Use the formula in the previous section to check. If the figure is wrong by more than a few pence, raise it with payroll and provide your written calculation. For plan-specific issues, contact HMRC. See also our guide on employer deducting on the wrong plan.
Error 5: Deductions continuing after loan is repaid
Your loan balance hit zero but deductions are still appearing on your payslip. This is a common issue caused by the HMRC stop notice delay. Your employer cannot stop without an SL2 from HMRC. Call SLC to confirm repayment and request an urgent stop notice. See our full guide on what to do when your employer uses the wrong plan for related plan-code refund claims.
When to Raise a Query
Not every payslip issue requires contacting HMRC. Some are resolved quickly through payroll. Use this decision framework to identify where to go first.
Contact payroll first when:
- The deduction amount does not match your calculation but the plan code looks correct
- A one-month deduction appears that you cannot explain
- You need confirmation of which plan code your employer holds for you
- A deduction appeared in the same pay period you started the job
Contact HMRC when:
- The plan code on your payslip is wrong and payroll says they are following HMRC instructions
- No deductions are being taken and you have been earning above your threshold for two or more months
- Your employer has not received an SL1 and you need HMRC to issue one
- Deductions are continuing after your loan is repaid and you need an SL2 issued
HMRC contact details
Phone: 0300 200 3300
Hours: Monday to Friday, 8am to 6pm
Have ready: National Insurance number, employer PAYE reference (from payslip), your plan code, and details of the issue.
Contact SLC when:
- You want to confirm your plan type and current balance
- Your loan is repaid and you need to request an urgent stop notice
- You want to claim a refund for overpayments
- You want to switch to direct debit for your final payments
SLC phone number: 0300 100 0611 (Monday to Friday, 8am to 6pm).
Frequently Asked Questions
Where do I find the student loan deduction on my payslip?
Look in the deductions section, usually the right-hand column or lower half of your payslip. The line is typically labelled Student Loan, SL Deduction, SL1, SL2, or similar. Some payroll systems include the plan number, for example Student Loan Plan 2. If you see SL1 or SL2 as a label, note that these refer to the HMRC start and stop notice forms, not necessarily your plan number.
What do the plan codes mean on my payslip?
Plan 1, 2, 4, and 5 each have different repayment thresholds and apply to different borrower groups. Plan 1 applies to pre-2012 borrowers in England and Wales, and to all Northern Ireland borrowers (£26,900 threshold). Plan 2 applies to England 2012–2023 starters and to Welsh borrowers from 2012 onwards (£29,385). Plan 4 applies to Scottish borrowers (£33,795). Plan 5 applies to 2023-onwards borrowers in England (£25,000). PGL applies to postgraduate borrowers (£21,000 at 6%). The wrong plan code means deductions at the wrong threshold.
How do I calculate if my deduction is correct?
Take your gross monthly pay (before income tax and NI). Subtract your monthly threshold for your plan. Multiply the result by 9% (or 6% for PGL). This gives your expected monthly deduction. Example: gross £3,200, Plan 2 monthly threshold £2,448, income above threshold £752, expected deduction £752 × 9% = £67.68. If your payslip shows a materially different figure, investigate.
Why is no student loan deduction showing on my payslip?
If your gross income is below your repayment threshold, no deduction is correct — nothing is due. If you earn above your threshold and still see no deduction, your employer may not have received an SL1 start notice from HMRC. This is common when starting a new job. Contact HMRC on 0300 200 3300 to check whether an SL1 has been issued to your employer. HMRC will reconcile any underpayment through your tax return.
Should I contact payroll or HMRC about a payslip error?
Contact payroll first for calculation errors or unexplained one-off deductions — they can often resolve these directly. Contact HMRC if the plan code is wrong and payroll cannot change it without HMRC instruction, if deductions are missing because your employer has no SL1, or if deductions are continuing after your loan is repaid. HMRC controls the plan code at source; payroll simply follows what HMRC sends them.
Student Loan Calculator UK Editorial Team
Editorial Team
This page is maintained by the Student Loan Calculator UK editorial team, checked against GOV.UK and Student Loans Company guidance. Read more about our editorial approach.