# How is 9% calculated of earnings for plan 1 student loan repayment?

Posts: 2 Newbie
edited 17 March 2023 at 10:18AM
I've read the recent article on this website & on the SLC website about how much you re-pay, but I don't understand the figures. On the Money Saving Expert web post it says: if your annual salary (before tax) is £25,000, you'll repay £432 a year of your student loan, but 9% of £25,000 = £2250, isn't it?

• Posts: 891
Forumite
You only pay a percentage of earnings above a certain threshold. For Plan 1, that's £20,195 (yearly), £1,682 (monthly) or £388 (weekly).

£25,000 - £20,195 = £4,805
£4,805 * 9% = £432.45

https://www.gov.uk/repaying-your-student-loan/what-you-pay
• Posts: 29,855
Forumite
edited 16 March 2023 at 12:31PM
It's income over a threshold that's subject to the 9% - the plan 1 threshold is £20,195, so £25,000 exceeds this threshold by £4,805, 9% of which is £432.

Edit: beaten to it by the above post!
• Posts: 6,804
Forumite
If you Salary Sacrifice to pension your salary is reduced for this calculation and you don’t pay it on the sacrificed salary.
• Posts: 936
Forumite
MX5huggy said:
If you Salary Sacrifice to pension your salary is reduced for this calculation and you don’t pay it on the sacrificed salary.
Quite a nice little bonus that.
• Posts: 46,750
MX5huggy said:
If you Salary Sacrifice to pension your salary is reduced for this calculation and you don’t pay it on the sacrificed salary.
Quite a nice little bonus that.
If you aren’t going to clear the loan. If you will clear the loan then it will incur extra interest.
I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.

#### Categories

• All Categories
• 341.7K Banking & Borrowing
• 249.7K Reduce Debt & Boost Income
• 449.1K Spending & Discounts
• 233.8K Work, Benefits & Business
• 606K Mortgages, Homes & Bills
• 172.5K Life & Family
• 246.7K Travel & Transport
• 1.5M Hobbies & Leisure
• 15.8K Discuss & Feedback
• 15.1K Coronavirus Support Boards