Student Loans and NHS Pay — What Gets Deducted

If you went to university, there's a good chance you'll see a student loan deduction on your NHS payslip. For many newly qualified NHS professionals, this is one of the more confusing deductions — especially if you're not sure which plan you're on or how the repayment amount is calculated. This guide explains how student loan repayments work alongside your NHS salary, which plan you're likely to be on, and how to make sure you're not overpaying.

Which Plan Are You On?

Repayments are collected automatically through PAYE once your earnings go above a certain threshold — and the threshold depends on which repayment plan you're on. Here's a quick summary:

Plan 1 applies if you started university in England or Wales before September 2012, or if you studied in Scotland or Northern Ireland. This has the lowest repayment threshold, meaning repayments kick in at a lower salary level. Plan 2 applies if you started university in England or Wales from September 2012 onwards. This has a higher threshold, so you start repaying at a higher salary. Plan 4 is for Scottish students who took out loans after 1998. Plan 5 applies to those who started courses in England from September 2023 onwards and sits somewhere between Plan 1 and Plan 2 in terms of the threshold.

If you're not sure which plan you're on, check the Student Loans Company website or your original loan paperwork. Getting this right matters because the thresholds are significantly different, and being on the wrong plan could mean you're paying more or less than you should.

How Repayments Are Calculated

Regardless of your plan type, you repay 9% of everything you earn above your plan's annual threshold. Your employer calculates this on a monthly basis, so they divide the annual threshold by 12 and deduct 9% of your earnings above that monthly figure. If you earn exactly the threshold amount in a given month, you'll pay nothing. If you earn above it, you'll pay 9% of the excess.

For most Band 5 starters, the monthly deduction is relatively modest — typically between £30 and £80 depending on your plan and exact salary. As your pay increases through incremental progression or band changes, the repayment amount will increase too. A Band 6 staff member might pay £80–£140 per month, and a Band 7 could see £130–£200 depending on their pay point and plan type.

How Unsocial Hours and Overtime Affect Repayments

If you do a lot of overtime or unsocial hours in a particular month, you might notice a slightly higher deduction that month. This is because the payroll system calculates student loan repayments on your actual monthly earnings, not just your basic salary. A month with several night shifts or a bank holiday shift could push your earnings high enough to trigger a noticeably larger repayment.

This is generally nothing to worry about — over the course of the year, the total repayment amount should even out. But it can be confusing if you're checking your payslip and wondering why the deduction has jumped. The answer is usually that you earned more that month due to enhancements.

The Two-Job Trap

One thing to watch out for: if you have two NHS jobs (for example, a substantive post and regular bank shifts processed through separate payrolls), each employer deducts student loan repayments independently. Both employers look at whether your monthly earnings from them exceed the monthly threshold, and if they do, both will deduct 9% of the excess. This can sometimes lead to overpayments because your total annual earnings might only warrant one set of repayments at the combined level, not two separate calculations.

If this happens, you can reclaim the overpaid amount from HMRC at the end of the tax year. You'll need to complete a self-assessment tax return or contact HMRC directly. Keep an eye on your total deductions across both payslips to make sure you're not paying significantly more than you should.

Does Salary Sacrifice Affect Repayments?

If you participate in a salary sacrifice scheme (like Cycle to Work or a lease car), your pensionable pay is reduced on paper. Because student loan repayments are based on your gross earnings after salary sacrifice deductions, participating in these schemes can slightly reduce your monthly student loan repayment. This is a minor side benefit, but it's worth knowing about.

When Your Loan Is Written Off

Student loans aren't permanent. Plan 1 loans are written off 25 years after the April following graduation (or when you turn 65, whichever comes first). Plan 2 loans are written off 30 years after the April following graduation. Plan 5 loans are written off 40 years after the April following graduation. For many NHS workers, particularly those who started on relatively modest salaries, there's a realistic chance you won't repay the full loan before it's written off — so the monthly deduction is more like an additional tax than a traditional debt repayment.

Use our calculator above to see how student loan repayments affect your take-home pay alongside all your other deductions. It supports all plan types and gives you an accurate monthly figure.