Step-by-step calculation
Step 1 — Confirm Plan 4
Plan 4 applies if you: - Started higher education in Scotland from September 2017 onwards - Took the loan through SAAS (Student Awards Agency Scotland)
Pre-2017 Scottish students are on Plan 1. If unsure, your SLC account confirms.
Step 2 — Identify threshold-relevant income
- Gross annual salary
- Subtract salary-sacrifice pension
- Subtract net-pay-arrangement pension
- Don't subtract relief-at-source pension
Step 3 — Apply the formula
Annual deduction = max(0, income − £33,795) × 9%
Step 4 — Per-period
- Monthly threshold: £33,795 / 12 = £2,816.25
- Weekly threshold: £33,795 / 52 = £650.00
- 4-weekly: £33,795 / 13 = £2,599.62
Each period: earnings above the period threshold × 9%, rounded DOWN per period.
Worked example 1 — Plan 4 on £35,000
Annual: - Above £33,795: £1,205 - 9% × £1,205 = £108/year
Monthly: - Gross: £2,917 - Period threshold: £2,816.25 - Above: £100.75 - 9% × £100.75 = £9.07 → rounds DOWN to £9/month
For Plan 4 borrowers just above threshold, deductions are very modest.
Worked example 2 — Plan 4 on £45,000
Annual: - Above £33,795: £11,205 - 9% × £11,205 = £1,008/year
Monthly: £84.
Worked example 3 — Plan 4 on £65,000
Annual: - Above £33,795: £31,205 - 9% × £31,205 = £2,808/year
Monthly: £234.
Worked example 4 — Plan 4 with Scottish tax context
A Plan 4 borrower on £55,000 in Scotland:
Income Tax (Scottish bands 2026/27): - Allowance £12,570 tax-free - Starter rate (19%, £0-£2,827 above PA): £537 - Basic rate (20%, £2,827-£14,921 above PA): £2,419 - Intermediate rate (21%, £14,921-£31,092 above PA): £3,396 - Higher rate (42%, £31,092 above PA): £4,762 on £11,338 - Total Scottish Income Tax: ~£11,114
NI: ~£3,144 (UK-wide)
Plan 4 student loan: 9% × (£55,000 − £33,795) = £1,908
Total deductions: £11,114 + £3,144 + £1,908 = £16,166 Take-home: £55,000 − £16,166 = £38,834
Compare to a Plan 2 rUK borrower on £55,000: - rUK Income Tax: ~£9,432 - NI: £3,144 - Plan 2: 9% × £25,615 = £2,305 - Total: £14,881 - Take-home: £40,119
Scottish Plan 4 borrower nets ~£1,285 less than rUK Plan 2 — driven mostly by the Scottish higher-rate-threshold difference, partially offset by Plan 4's higher student-loan threshold.
Plan 4 + Postgraduate Loan
Postgraduate Loan stacks on Plan 4 just like any other plan:
| Salary | Plan 4 (9% above £33,795) | PGL (6% above £21,000) | Combined |
|---|---|---|---|
| £35,000 | £108 | £840 | £948 |
| £45,000 | £1,008 | £1,440 | £2,448 |
| £55,000 | £1,908 | £2,040 | £3,948 |
Most Scottish postgrads don't have PGL (Scottish postgraduate funding is via SAAS separately). PGL is England/Wales-issued.
Salary sacrifice optimisation
For Plan 4 borrowers between £33,795 and £37,000, salary sacrifice can eliminate the deduction:
Example: £35,000 salary, 5% salary sacrifice (£1,750):
Without sacrifice: - Above £33,795: £1,205 × 9% = £108/year
With sacrifice: - Threshold-relevant income: £33,250 - Below £33,795: £0 student loan
Total saving: £108 SL + ~£490 Income Tax + NI saved. £1,750 in pension.
Plan 4 interest
Plan 4 interest is set by the Scottish Government via SAAS: - Base rate: Bank of England base rate + 1% - Subject to caps
In low-RPI years this can be lower than Plan 2's RPI-linked rate. In high-RPI years comparable. The interest doesn't change the 9% deduction.
When Plan 4 writes off
30 years from first becoming repayable — same as Plan 2.
For a 2020 graduate first repayable April 2021: write-off April 2051.
After write-off, the balance is forgiven with no penalty.
Mortgage / large purchase context
Lenders treat Plan 4 student loan as a regular monthly outgoing. For mortgage affordability, your monthly Plan 4 deduction reduces your effective disposable income.
For a £55,000 earner with £159/month Plan 4 deduction: mortgage affordability calculation uses ~£3,071 net monthly income (after all deductions including Plan 4) rather than ~£3,231 (without).
Practical checklist
- Confirm Plan 4 in SLC account
- Calculate threshold-relevant income (gross − salary-sacrifice pension)
- Apply formula: max(0, income − £33,795) × 9%
- Check Scottish tax bands for combined take-home — see Scottish tax codes →
- Consider pension sacrifice if within ~£3,000 of threshold
- Use the student loan calculator — set Region to Scotland for full take-home
In short
Plan 4 student loan repayment for 2026/27: 9% above £33,795 (highest threshold in the UK), per pay period. Applies to Scottish post-2017 starters. Combine with Scotland's higher-rate threshold of £43,663 for the full take-home picture. 30-year write-off. Use the student loan calculator for scenarios. For Plan 4 specifics see Plan 4 thresholds and write-off →.