Sole trader student loan calculator

Student loan repayments for self-employed people

If you are self-employed with a student loan, your repayments are calculated on taxable profit through Self Assessment — not deducted monthly via PAYE as they are for employees. The rate and threshold depend on which plan you are on.

Select your plan type in the calculator to include student loan repayments in the total deductions estimate. Plan 1, 2, 4, 5 and Postgraduate Loan all have different repayment thresholds and rates.

• Plan 2 (most common post-2012 England/Wales): 9% on income above £29,385 for 2026/27.
• Plan 1 (pre-2012): 9% above £26,900. Plan 4 (Scotland): 9% above £33,795.
• Postgraduate Loan: 6% on income above £21,000. Can stack with undergraduate plans.

Rates checked against Budget 2026 Annex A on 30 October 2026. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance. Estimates for planning only — not tax, accounting or financial advice.

How self-employed student loan repayments are worked out

If you are self-employed, nothing is deducted from your income as you earn it. HMRC works out your student loan repayment from your Self Assessment return, based on your income for the whole tax year, and adds it to the bill due on 31 January. If you also have a job, your employer takes repayments from your salary through PAYE, and the return works out what is due on your combined income, so the Self Assessment figure is the extra on top.

For 2026/27 the yearly thresholds are £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4, £25,000 for Plan 5 and £21,000 for the Postgraduate Loan. Plans 1, 2, 4 and 5 take 9% of income above the threshold; the Postgraduate Loan takes 6%. If you have a Postgraduate Loan and an undergraduate plan, you repay both.

Student loan repayments are not part of payments on account. The whole repayment is paid with the January balancing payment, so it adds to January but not to July. It is not a tax either: it does not change your Income Tax or Class 4 National Insurance.

£40,000 of profit on each plan, 2026/27

No other income. Plan 4 is shown with Scottish Income Tax, since it is the Scottish plan; the others use rates for England.

With a Plan 2 and a Postgraduate Loan together, the same £40,000 means repaying £2,095.35: 9% over £29,385 plus 6% over £21,000.

The threshold matters more than the rate. On £28,000 of profit a Plan 2 borrower repays £0, because £28,000 is under the £29,385 threshold, while a Plan 5 borrower repays £270: 9% of the £3,000 above £25,000.

A job plus self-employment: a £25,000 salary is under the Plan 2 threshold, so nothing is taken through PAYE. Add £10,000 of profit and your income for the year is £35,000, so the return asks for £505.35: 9% of the £5,615 above £29,385, all due with the January balancing payment.

Every figure here comes from the calculator above, using 2026/27 rates. Estimates for planning only, not tax advice.

Student loan pitfalls

• Expecting the repayment to be spread over the year. For the self-employed it is all due with the January balancing payment.
• Forgetting the loan when you set money aside. Add 9% (6% for a Postgraduate Loan) of your income above the threshold to your tax pot.
• Choosing the wrong plan. It depends on where and when you started your course; your Student Loans Company account shows your plan.
• Counting repayments as a business expense. They are personal and do not reduce your profit.

Self-employed student loans — questions