Self Employed Student Loan Guide
How student loan repayments are calculated on Self Assessment for self-employed individuals and company directors. 2026/27 thresholds (Plan 1, Plan 2, Plan 4, Plan 5, Postgrad).
In one sentence
Self-employed individuals and company directors pay student loan repayments via Self Assessment calculated on total taxable profits and dividend income above plan thresholds.
Quick answer
- Calculated on Self Assessment (SA100) based on total taxable income including dividends
- 2026/27 Thresholds: Plan 1 £26,065, Plan 2 £27,295, Plan 4 £32,745, Plan 5 £25,000, Postgrad £21,000
- Repayments are 9% of income above threshold (6% for Postgraduate loans)
- Student loan payments on Self Assessment do NOT trigger advance Payments on Account
Student loan repayments when self-employed or a director
If you are self-employed, a company director, or earn untaxed income in the UK, your student loan repayments are calculated and collected through your annual Self Assessment tax return (SA100).
Unlike employed workers whose repayments are deducted automatically each month from their payslip via PAYE, self-employed individuals pay their student loan in one lump sum alongside their Income Tax and National Insurance by 31 January.
2026/27 Student Loan thresholds and rates
Repayments are calculated as a percentage of your total income above your plan's annual threshold:
| Plan Type | 2026/27 Annual Threshold | Repayment Rate | Who it applies to |
|---|---|---|---|
| Plan 1 | £26,065 | 9% above threshold | English/Welsh students who started uni before 1 Sept 2012, or Northern Irish students |
| Plan 2 | £27,295 | 9% above threshold | English/Welsh students who started uni between 1 Sept 2012 and 31 July 2023 |
| Plan 4 | £32,745 | 9% above threshold | Scottish students who applied through SAAS |
| Plan 5 | £25,000 | 9% above threshold | English students who started uni on or after 1 August 2023 |
| Postgraduate | £21,000 | 6% above threshold | Master's or Doctoral loan borrowers across the UK |
How HMRC calculates student loan on Self Assessment
HMRC calculates student loan repayments based on your Total Gross Taxable Income, not just your net trading profit. This income total includes:
- Self-employed profits: Net trading profit after allowable expenses and capital allowances.
- Director dividends: Dividend distributions taken from a limited company.
- Employment salary: Any PAYE salary earned from employment or directorships.
- Property rental profits: Net UK or overseas rental income.
Because dividend income is included in the calculation, company directors who take a low salary and high dividends will still owe student loan repayments on their dividend earnings when filing Self Assessment.
Worked example: Sole trader with Plan 2 loan
Scenario:
- Self-Employed Profit: £35,000
- Plan 2 Threshold (2026/27): £27,295
- Income subject to repayment: £35,000 - £27,295 = £7,705
- Student Loan Due (9%): £7,705 × 9% = £693.45
This £693.45 is added to your Income Tax and Class 4 NI bill on 31 January.
What if you have both PAYE employment and self-employed income?
If you have a job where your employer deducts student loan payments via PAYE, and you also file a Self Assessment return for side-hustle profits:
- Your Self Assessment return will aggregate your total combined income from both sources.
- HMRC will calculate the total annual student loan due on that combined income.
- HMRC then deducts the student loan payments already collected by your employer under PAYE during the tax year (shown on your P60).
- You pay the remaining balance on your untaxed income via Self Assessment by 31 January.
Important: Student loans do not trigger Payments on Account
While student loan repayments increase your final 31 January tax bill, HMRC rules state that student loan amounts are excluded when calculating your advance Payments on Account for the following tax year.
Read our guide on how Self Assessment Payments on Account work or see how our Self Assessment Tax Calculator estimates your student loan obligations.
Filing Self Assessment with a Student Loan?
Book a 20-minute call with an experienced UK accountant. We will verify your student loan plan, review allowable business deductions, and prepare your SA100 return accurately.
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