How student loan repayment calculated?
Your employer will take repayments of your loan from your salary during the pay period. The pay period could be any time; week, two weeks and calendar month etc. There is an earnings threshold, which are:
- £352 a week
- £1,527 a month
- £18,330 a year
These thresholds are for the year 2018-2019 and subject to change with the new tax year.
You will pay 9% of your income over the threshold. For example, if you are earning £1,800 per month then you will pay 9% on the difference between you have earned and threshold:
- £1,800 – £1,527 = £273
- 9% of £273 is £24.57 only.
The same formula applies if you are getting paid on monthly basis or earn more than £18,330 a year by working extra hours.