Yes. A Postgraduate Loan affects your take-home pay, not your gross salary. Your employer still pays you the same salary on paper, but your net pay can be lower because postgraduate loan repayments are deducted through payroll once your earnings go above the repayment threshold.
Does a Postgraduate Loan reduce your salary or just your take-home pay?
It reduces your take-home pay, not your contracted salary. If your salary is £35,000, your salary is still £35,000. The loan repayment is simply another deduction on your payslip, alongside Income Tax and National Insurance.
This matters because a Postgraduate Loan does not move you into a different tax band and does not change the rate of National Insurance you pay. It is calculated separately from tax. In practice, though, it can make a pay rise feel smaller because part of the extra pay is deducted.
How much do you repay on a Postgraduate Loan from salary?
In 2026/27, Postgraduate Loan repayments are 6% of earnings above £21,000. This threshold applies to annual earnings. If you are paid through PAYE, deductions are usually worked out automatically from your pay.
Threshold: £21,000 a year
Repayment rate: 6%
Only earnings above the threshold are counted
Repayments usually come off through payroll if you are employed
A simple annual example: if you earn £30,000, the amount above the threshold is £9,000. Six per cent of £9,000 is £540 for the year. That is about £45 a month on average if your pay is spread evenly.
If you earn £40,000, the amount above the threshold is £19,000. Six per cent of £19,000 is £1,140 a year. That is about £95 a month on average.
At what salary do Postgraduate Loan repayments start?
They start once your earnings go above £21,000 for the year in 2026/27. If your pay is handled through PAYE, your employer uses the relevant pay-period threshold, so you may see deductions in some months and not others if your income varies.
That means bonuses, overtime or irregular pay can affect what is deducted in a given month. A higher-than-usual payslip can trigger a postgraduate loan deduction even if other months are lower.
Do Postgraduate Loans affect tax or National Insurance?
No. A Postgraduate Loan does not reduce your taxable pay for Income Tax, and it does not reduce the earnings used for employee National Insurance. It is an extra deduction calculated after those rules are applied.
This is why postgraduate loan repayments can feel more noticeable than pension contributions or salary sacrifice. Those can change the pay figure used for tax or National Insurance in some cases. A Postgraduate Loan does not. It simply comes off your pay once the threshold is passed.
Can you pay both an undergraduate student loan and a Postgraduate Loan at the same time?
Yes. If you have both, you can repay both at the same time. The Postgraduate Loan is separate from undergraduate plans, so the deductions can stack on top of each other.
Plan 1 threshold: £26,900 at 9%
Plan 2 threshold: £29,385 at 9%
Plan 4 threshold: £33,795 at 9%
Plan 5 threshold: £25,000 at 9%
Postgraduate Loan threshold: £21,000 at 6%
For example, if you are above both thresholds, you might pay Income Tax, National Insurance, an undergraduate loan repayment and a postgraduate loan repayment from the same payslip. This does not mean you are taxed twice. It means separate repayment systems are all applying at once.
What does a Postgraduate Loan look like on your payslip?
It usually appears as a separate deduction line. The wording varies by payroll software, but it is commonly labelled as Postgraduate Loan, PGL or something similar. It should sit apart from tax, NI and any undergraduate student loan deduction.
If you are trying to work out why your net pay changed, check whether a postgraduate deduction has appeared after a pay rise, bonus or job change. It is one of the easier deductions to miss because many people focus on tax and NI first.
How much can a Postgraduate Loan reduce take-home pay at different salaries?
The effect depends on how far your earnings are above £21,000. The repayment rises steadily because it is 6% of the amount above the threshold. It is not an all-or-nothing deduction on your full salary.
£25,000 salary: repay £240 a year
£30,000 salary: repay £540 a year
£35,000 salary: repay £840 a year
£40,000 salary: repay £1,140 a year
£50,000 salary: repay £1,740 a year
These examples show only the postgraduate loan deduction itself. Your full take-home pay also depends on Income Tax, National Insurance, pension contributions and whether you repay any undergraduate student loan as well.
Does a Postgraduate Loan affect a pay rise being worth it?
Yes, it can reduce how much of a pay rise reaches your bank account, but it does not make a pay rise pointless. If your salary goes up, your gross pay still rises. The point is simply that some of the increase may be absorbed by tax, NI and loan deductions.
This is especially relevant if you are comparing job offers or negotiating pay. A higher salary can produce a smaller net increase than expected once all deductions are included. A Postgraduate Loan is one reason the jump in take-home pay may look lower than the headline figure suggests.
Do Postgraduate Loan repayments stop automatically?
Usually, payroll deductions continue until the Student Loans Company tells your employer to stop, or until your earnings fall below the relevant pay-period threshold. If you think you have overpaid, the issue is normally dealt with through the repayment system rather than by changing your salary.
Because deductions are based on payroll periods, they do not always match a simple annual view perfectly during the year. That is one reason payslips can vary from month to month, especially where bonuses or irregular hours are involved.
How can you check the real impact on your pay?
The easiest way is to run your salary with and without a Postgraduate Loan deduction. That shows the direct effect on monthly and annual take-home pay. It is also useful if you have an undergraduate plan at the same time, because combined deductions can be larger than expected.
You can then compare the result with your payslip. If the figures are noticeably different, check your loan plan, tax code and pension setup before assuming payroll is wrong.