Student Loan Repayments on Maternity Leave

How Student Loan Repayments Work Through PAYE

Before diving into what changes during maternity leave, it helps to understand the normal mechanics. If you are employed in the UK, your employer deducts student loan repayments directly from your salary through the Pay As You Earn (PAYE) system. The amount deducted depends on two things: which repayment plan you are on, and how much you earn above the relevant threshold. You can use our student loan repayment calculator to model your exact situation before and after leave.

Repayments are calculated on a per-pay-period basis. If you are paid monthly, HMRC looks at whether your gross pay that month exceeds one-twelfth of the annual threshold. If you are paid weekly, the comparison is against one-fifty-second of the annual threshold. This per-period calculation is crucial during maternity leave because your pay changes from month to month as you transition between full pay, SMP, and potentially unpaid leave.

Current Repayment Thresholds — 2026/27 Tax Year

Each plan has its own annual threshold. You only repay 9% (or 6% for Postgraduate Loans) of earnings above the threshold. Here is a summary for the current tax year:

The monthly equivalent is the figure that matters most during maternity leave. If your gross pay in any given month falls below it, no student loan deduction is made that month.

Statutory Maternity Pay (SMP) and the Impact on Repayments

Statutory Maternity Pay for the 2026/27 tax year is paid for up to 39 weeks. The first six weeks are paid at 90% of your average weekly earnings (AWE), and the remaining 33 weeks at the lower of 90% AWE or £187.18 per week. After the 39 paid weeks, if you take additional leave up to the 52-week maximum, those final weeks are unpaid.

Let us work through a practical example. Suppose you earn £32,000 per year — roughly £2,666 per month before tax. During the first six weeks of SMP, you receive 90% of your average weekly earnings, which works out to approximately £553 per week or around £2,400 per month. Depending on your plan, this may or may not trigger a deduction — it would exceed the Plan 5 monthly threshold of £2,083.33 but fall below the Plan 4 threshold of £2,816.25.

After the initial six weeks, your SMP drops to £187.18 per week — just £811 per month. This is significantly below every repayment threshold, including the lowest (Postgraduate Loan at £1,750 per month). At this point, your student loan deductions stop entirely. No action is required on your part; your employer's payroll system handles the calculation automatically. You can see how these numbers interact using our repayment calculator.

Enhanced Maternity Pay From Employers

Many employers, particularly in the public sector, large corporations, and professional services firms, offer enhanced maternity pay that goes beyond the statutory minimum. Common packages include full pay for the first three or even six months of leave. If your enhanced maternity pay keeps your monthly earnings above your plan's threshold, student loan deductions will continue during that period.

For example, if your employer pays full salary (£2,666 per month in our example) for the first six months, you would continue to make Plan 2 repayments of around £26 per month during that time. Once you transition to the lower SMP rate or to unpaid leave, deductions would cease. Some employers blend enhanced pay with SMP in different configurations, so it is worth checking your specific maternity policy and running the numbers through a calculator to understand month by month exactly when your deductions will stop and restart.

Occupational Maternity Schemes and Salary Sacrifice

If you participate in a salary sacrifice arrangement — for instance, a workplace pension scheme, cycle-to-work scheme, or childcare vouchers — your gross pay is already reduced before student loan deductions are calculated. During maternity leave, some salary sacrifice arrangements are suspended while others continue. The interaction between salary sacrifice and maternity pay can be complex, and it directly affects whether your gross pay crosses the student loan threshold. If in doubt, speak to your payroll department or use our calculator to model the scenario.

Paternity Leave and Student Loan Repayments

Statutory Paternity Pay (SPP) is currently paid at £187.18 per week (the same flat rate as the lower SMP rate) for one or two weeks. Because paternity leave is so short and many employers top up to full pay, most people on paternity leave will not see a change in their student loan deductions. However, if your employer pays only statutory paternity pay and you have an unusually low salary near the threshold, it is possible your deductions could briefly stop. Check the specific Plan 1 or Plan 2 thresholds to see whether your SPP crosses the line.

Shared Parental Leave (ShPL)

Shared Parental Leave allows parents to split up to 50 weeks of leave and 37 weeks of pay between them. Statutory Shared Parental Pay (ShPP) is paid at the same £187.18 per week rate as SMP. This means the student loan implications are identical: if you are receiving only ShPP, your income will be well below every repayment threshold and no deductions will be made. If your employer enhances ShPL pay, the same analysis applies as for enhanced maternity pay above. You may find our part-time work guide useful if you return on reduced hours after shared parental leave.

The Write-Off Clock Keeps Ticking

One of the most important things to understand is that your loan's write-off countdown does not pause during maternity leave or any period when you earn below the threshold. The clock started in the April after you left your course (or the April after you became eligible to repay), and it runs continuously regardless of your employment status or earnings.

• Plan 1: Written off 25 years after the April you were first eligible to repay. Interest is fixed at 3.2% for 2026/27.
• Plan 2: Written off 30 years after graduation. Interest ranges from 3.2% to 6.2% depending on income.
• Plan 4: Written off 30 years after graduation. Interest is 3.2% for 2026/27.
• Plan 5: Written off 40 years after graduation. Interest is 3.2% for 2026/27.
• Postgraduate Loan: Written off 30 years after graduation. Interest is 6.2% for 2026/27.

For many borrowers, particularly those on Plan 2 with large balances, the fact that time passes without repayments during maternity leave can actually be financially advantageous — every month that ticks by brings you closer to write-off without increasing total repayments. If your loan is likely to be written off before you clear the balance, periods of non-repayment effectively reduce the total amount you will ever pay back. Our student loan calculator can show you whether you are on track for write-off or full repayment.

Interest Accrual During Maternity Leave

While you are not making repayments, interest continues to accrue on your outstanding balance. For Plan 1 and Plan 4, this is a flat 3.2% per year. For Plan 2, the interest rate depends on your income: when you earn below the threshold (as you will during most of maternity leave), the rate drops to the lower bound of 3.2% (RPI). Once you return to work and your salary rises, the rate adjusts upward, potentially reaching 6.2% at higher earnings.

It is important not to panic about accruing interest. For most borrowers, the interest added during a year of reduced earnings is modest compared to the overall balance, and as mentioned above, if you are heading for write-off, it does not cost you anything in practice.

Self-Employed During or After Maternity Leave

If you are self-employed, student loan repayments are handled through your annual Self Assessment tax return rather than PAYE. Maternity Allowance (MA) — the equivalent of SMP for self-employed mothers — is paid at £187.18 per week and is not taxable, meaning it does not count as income for student loan purposes. Your student loan repayment for the tax year will be calculated on your actual self-employed profits, which may be significantly lower during a year when you take maternity leave. Read more about how income affects repayments in our part-time work article.

What You Need to Do

In most cases, you do not need to do anything. The PAYE system handles everything automatically. However, there are a few situations where action might be needed:

• Self-employed: Make sure your Self Assessment accurately reflects your reduced income during the maternity period.
• Working abroad: If you are on an overseas maternity arrangement, you must still report your income to the Student Loans Company. See our working abroad guide for details.
• Receiving benefits: If you claim Universal Credit or other benefits during or after maternity leave, those are not counted as income for student loan purposes. Our benefits guide covers this in detail.
• Overpayment: If your employer incorrectly continues deductions during low-pay periods, you can apply to HMRC for a refund.

Returning to Work After Maternity Leave

When you return to work — whether full-time, part-time, or on a phased return — student loan deductions restart as soon as your pay exceeds the threshold again. If you return part-time and your reduced salary falls below the annual threshold, you may find that deductions are minimal or zero. Our part-time work guide explains how the thresholds work on a pro-rata basis for different pay frequencies.

If you change your working pattern — for example, moving from five days to three days per week — it is worth recalculating your expected repayments. A salary of £32,000 full-time becomes roughly £19,200 at three-fifths, which would fall below every plan threshold except the Postgraduate Loan. Use the calculator to see the impact on your specific plan and balance.

Multiple Loans and Maternity Leave

If you have both an undergraduate and a Postgraduate Loan, each is assessed independently against its own threshold. It is possible to be below the undergraduate threshold but above the Postgraduate Loan threshold (£21,000 or £1,750 per month), particularly during the enhanced-pay phase of maternity leave. During the lower SMP phase, both deductions would typically stop.

Key Takeaways

• SMP at £187.18 per week is well below every student loan repayment threshold — deductions stop automatically.
• Enhanced maternity pay above your plan's monthly threshold will still trigger deductions.
• The write-off clock keeps running, which can work in your favour if your loan is likely to be written off.
• Interest still accrues but at a reduced rate for income-linked plans like Plan 2.
• Paternity leave and shared parental leave follow the same principles.
• No action is needed for PAYE employees — payroll handles it automatically.
• Use our student loan repayment calculator to model exactly how much you will pay before, during, and after leave.