Student loans and gig work (2025-26)

Summary

If you have a student loan and you do gig work in 2025-26, your gig profits sit on top of any PAYE wages and you repay 9% (or 6% for postgrad) on income above your plan's threshold through Self Assessment. It absolutely counts.

The key 2025-26 thresholds are about £26,065 (Plan 1), £28,470 (Plan 2), £32,745 (Plan 4), £25,000 (Plan 5) and £21,000 (Postgrad), and HMRC uses your combined employment and gig income to work out what you owe.

Not declaring gig income does not "hide" it from the Student Loans Company. HMRC and SLC share data, and unpaid student loan deductions just stack up as extra debt.

Key facts (UK 2025-26)

• Tax year runs from 6 April 2025 to 5 April 2026.
• In 2025-26, the main repayment thresholds are (per year, before tax):
  • Plan 1: £26,065, repay 9% of income above this.
  • Plan 2: £28,470, repay 9% of income above this.
  • Plan 4 (Scotland): £32,745, repay 9% of income above this.
  • Plan 5: £25,000, repay 9% of income above this.
  • Postgraduate loan: £21,000, repay 6% of income above this.
• For self-employed / gig income, you repay 9% (Plans 1, 2, 4, 5) or 6% (Postgrad) of your total income above your plan's threshold, via Self Assessment. Nothing is deducted automatically from Uber, Deliveroo or Amazon Flex payouts.
• If you are both employed and doing gig work, your employer deducts loan repayments from your wages through PAYE, and Self Assessment then adds extra repayments based on the combined total if your full-year income is above the threshold.
• HMRC collects the repayments via your Self Assessment bill and then passes them to the Student Loans Company (SLC).
• HMRC and SLC now have formal agreements and pilots to compare tax records with student loan records, so unpaid repayments linked to undeclared income are on their radar.

Legislation, case law, regulation

• Teaching and Higher Education Act 1998 and later regulations: created income-contingent student loans (Plans 1 and 2).
• Student Loans (Repayment) Regulations (various years): set thresholds and repayment rules for Plans 1, 2, 4, 5 and postgraduate loans.
• Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003): governs PAYE and the way employers deduct loan repayments from wages.
• Taxes Management Act 1970: underpins Self Assessment; student loan repayments from self-employed income are calculated and collected through this system.
• GOV.UK: Repaying your student loan, How much you repay: confirms that in 2025-26 you repay 9% (Plans 1, 2, 4, 5) or 6% (Postgrad) of income above your threshold, and that combined employment and self-employment income is used.
• HMRC/SLC agreements (Digital Economy Act framework): allow HMRC and SLC to exchange information about employment type and Self Assessment records, including pilots targeting fraud and mismatches.

How it actually works

1. Know which plan you're on

Before talking numbers, you must know your loan plan.

• Pre-2012 English/Welsh loans are usually Plan 1.
• Most 2012-2023 English/Welsh undergrad loans are Plan 2.
• Scottish and Northern Irish loans are often Plan 4 or Plan 1.
• Newer "Plan 5" loans apply to certain students starting from 2023 onwards.
• Postgraduate loans sit on top, with their own £21,000 threshold at 6%.

Your Student Loans Company account or GOV.UK letter tells you which plan(s) you have.

2. How repayments work when you're self-employed

If you only do gig work (no PAYE job):

• You file a Self Assessment tax return each year, showing your total income from all sources, including gig profits.
• HMRC looks at your total income and your plan's threshold for 2025-26.
• It charges:
  • 9% of the amount over the threshold for Plans 1/2/4/5.
  • 6% of the amount over £21,000 for a postgraduate loan.
• That amount is added to your Self Assessment bill and paid to HMRC; HMRC sends the loan-repayment part on to SLC.

No one is taking this from your Uber or Deliveroo payout automatically. If you do not file correctly, the student loan part simply goes unpaid and can be chased later.

3. How it works when you're employed and doing gig work

If you have a PAYE job and gig income:

• Your employer deducts student loan repayments from your wages through PAYE, based only on your job income and your loan plan.
• At year end, your Self Assessment return shows everything, job wages plus gig profits.
• HMRC recomputes how much student loan you should pay on the combined income and compares it to what was already deducted via PAYE.
• If PAYE deductions were not enough (because gig profits pushed you higher), Self Assessment adds an extra student loan charge.
• If PAYE deducted too much, it can adjust. But in practice, with gig work, under-payment is much more common than over-payment.

Think of gig work as topping up your income, and your loan repayment rides on the total.

4. What happens if you don't declare gig income?

Legally:

• You must tell HMRC about all taxable income, including gig work.
• If you leave gig income off your return, you are under-paying tax, National Insurance and student loan repayments.

In 2025-26 HMRC and SLC are not blind:

• HMRC's Connect system cross-checks bank data, platform reporting and previous returns for undeclared income.
• HMRC and SLC are piloting to spot gaps between tax records and loan applications/repayments.

So the idea circulating on Reddit and TikTok that "gig income doesn't affect your student loan if you don't mention it" is fantasy. You're just stacking up a debt and risk of penalties.

5. Plan 5 and postgraduate loans

For Plan 5 in 2025-26:

• Threshold: £25,000.
• Rate: 9% above the threshold.

For postgraduate loans:

• Threshold: £21,000 (unchanged in 2025-26).
• Rate: 6% of income above that.

If you hold, say, Plan 2 + Postgrad, HMRC can charge both 9% and 6% on the overlapping part of your income above each threshold.

Worked example

You have a Plan 2 loan only.

• PAYE job: £25,000 salary in 2025-26.
• Gig work (Uber / Deliveroo): £10,000 profit in 2025-26.

Step 1, check the Plan 2 threshold

Plan 2 threshold 2025-26: £28,470 per year.

Step 2, what your employer does

Employer sees:

• Salary = £25,000, which is below the Plan 2 threshold of £28,470.
• So no student loan is deducted through PAYE. Your payslips show £0 loan deduction.

Step 3, what Self Assessment sees

HMRC looks at your Self Assessment return:

• Total income = £25,000 (job) + £10,000 (gig profit) = £35,000.
• This is £6,530 above the Plan 2 threshold of £28,470.

Student loan due on Self Assessment:

• 9% of £6,530 = £587.70.

So, because of gig work:

• You go from £0 student loan via PAYE
• To about £587.70 student loan due on your Self Assessment bill for 2025-26, on top of income tax and National Insurance.

If you also had a postgraduate loan:

• The combined income (£35,000) is £14,000 above the £21,000 PG threshold.
• PG loan repayment: 6% of £14,000 = £840.
• Total student-loan line on your Self Assessment: roughly £1,427.70 (Plan 2 + PG), all driven by the combined income.

What Reddit, TikTok and forums get wrong

1. "Gig income doesn't count for student loan, it's only your PAYE job that matters." Wrong. HMRC explicitly says Self Assessment uses your combined income from employment and self-employment to calculate student loan repayments.

2. "If my employer hasn't taken any student loan from my wages, I don't owe anything." Misleading. PAYE only sees your salary; Self Assessment adds gig profits on top and can create a big one-off loan bill at the end of the year.

3. "Student Loans Company will never know about my side gig." Fantasy. SLC already uses HMRC data to track income; there is a formal HMRC-SLC pilot, and HMRC's Connect system is designed to spot undeclared income.

4. "You pay 9% of your entire income, not just the bit over the threshold." Wrong. The 9% (or 6%) applies only to income above the threshold for your plan.

5. "Self-employed people have to pay student loan separately to SLC." No. Once you include student loan on your Self Assessment, you pay HMRC, and HMRC passes the right amount on to SLC.

Action steps for the reader

1. Log in to your Student Loans Company account and confirm exactly which plan(s) you are on (Plan 1, 2, 4, 5, Postgrad).
2. Add up your expected total income for 2025-26: wages plus gig profits after expenses.
3. Compare that total to your plan's 2025-26 threshold and work out roughly how much 9% (and 6% if you have a postgrad loan) will come to, budget for it alongside income tax and NI.
4. When you fill in Self Assessment, tick the student loan sections and enter the correct plan; do not skip it just because PAYE has not taken anything.
5. If you already know you will owe student loan through Self Assessment, treat it as part of your "tax pot" and move a bit extra from each Uber/Deliveroo/Amazon Flex payout into your savings.

Related tools GigKiln should build

• Student-loan impact calculator: shows how an extra £5,000 to £20,000 of gig profit changes student loan repayments per plan type.
• Combined-income checker: takes PAYE salary plus gig profit and explains whether the worker will cross their plan's threshold in 2025-26.
• Self Assessment student-loan helper: a step-by-step explainer for filling in the student-loan boxes on the online return.

Related guides

• "Self Assessment for gig workers with student loans"
• "How gig work affects Plan 2 and Plan 5 student loan repayments"
• "Budgeting for tax, National Insurance and student loans from Uber and Deliveroo income"
• "HMRC data sharing with the Student Loans Company, what gig workers need to know"

Sources

Primary

• GOV.UK, Student loans: a guide to terms and conditions 2025 to 2026, accessed 18 April 2026.
• GOV.UK, Repaying your student loan: How much you repay, accessed 18 April 2026.
• GOV.UK / HMRC, 2025 to 2026: Student and Postgraduate Loan deduction tables (SL3), accessed 18 April 2026.

Secondary

• Cintra, Student Loan Repayment Thresholds for 2025/26, accessed 18 April 2026.
• LITRG, Student loan repayments and Self Assessment: student loan repayments, accessed 18 April 2026.
• Heights Accountancy, Student loan repayments (UK 2025/26), accessed 18 April 2026.
• StudentLoanCalculator.uk, UK Student Loan Repayment Thresholds 2025/26, accessed 18 April 2026.
• Crunch, Student Loan Repayment When You're Self-Employed, accessed 18 April 2026.
• nidirect, Repaying student loans through Self Assessment, accessed 18 April 2026.
• GOV.UK / Cabinet Office, One-off data share between HMRC and Student Loans Company, accessed 18 April 2026.
• Tapoly, How Does HMRC Know About Undeclared Income?, accessed 18 April 2026.
• The Accountancy Partnership, Student Loan Repayments for the Self-Employed, accessed 18 April 2026.