Plan 4 in Scotland on GBP 50,000

Scenario

Take a £50,000 salary and model it using two settings simultaneously: the Scotland income-tax region and Plan 4 student-loan repayment. Plan 4 is the Scottish undergraduate student loan repayment plan, with a 2025-26 threshold of £31,395 — higher than the Plan 2 threshold of £27,295.

Scotland income tax at £50,000

Personal allowance: £12,570. Taxable income: £37,430. Distributed across Scotland's five bands:

| Band | Taxable range | Width | Rate | Tax | |---|---|---|---|---| | Starter | £1–£2,827 | £2,827 | 19% | £537 | | Basic | £2,828–£14,921 | £12,094 | 20% | £2,419 | | Intermediate | £14,922–£31,092 | £16,171 | 21% | £3,396 | | Higher | £31,093–£37,430 | £6,338 | 42% | £2,662 | | Total income tax | | | | £9,014 |

Employee NI

NI uses UK-wide rates regardless of tax region. Earnings above the personal allowance: £37,430.

Employee NI: £37,430 x 8% = £2,994.

Plan 4 repayment

Plan 4 threshold: £31,395. Repayable income: £50,000 - £31,395 = £18,605.

Repayment: £18,605 x 9% = £1,674/year = £140/month.

Full deduction breakdown

| Deduction | Annual | Monthly | |---|---|---| | Scotland income tax | £9,014 | £751 | | Employee NI | £2,994 | £250 | | Plan 4 repayment | £1,674 | £140 | | Take-home pay | £36,318 | £3,027 |

Plan 4 versus Plan 2 at the same salary

The Plan 4 threshold (£31,395) is higher than the Plan 2 threshold (£27,295) by £4,100. That means Plan 4 repayments start later, and the total annual repayment is lower than Plan 2 at any given salary above both thresholds.

| | Plan 4 (Scotland) | Plan 2 (rUK) | Difference | |---|---|---|---| | Repayment threshold | £31,395 | £27,295 | Plan 4 starts £4,100 later | | Repayable income at £50k | £18,605 | £22,705 | Plan 4 is £4,100 lower | | Annual repayment at £50k | £1,674 | £2,043 | Plan 4 saves £369/year | | Monthly repayment | £140 | £170 | Plan 4 saves £30/month |

At £50,000, Plan 4 repayments are £369/year lower than Plan 2.

Scotland Plan 4 versus rUK Plan 2 — full comparison

| | Scotland + Plan 4 | rUK + Plan 2 | Difference | |---|---|---|---| | Income tax | £9,014 | £7,486 | Scotland pays £1,528 more | | Employee NI | £2,994 | £2,994 | Equal | | Student loan repayment | £1,674 | £2,043 | Plan 4 pays £369 less | | Total deductions | £13,682 | £12,523 | Scotland pays £1,159 more | | Take-home (annual) | £36,318 | £37,477 | Scotland £1,159 less | | Take-home (monthly) | £3,027 | £3,123 | Scotland £97 less |

The higher Scotland income tax (£1,528 extra) more than offsets the Plan 4 repayment advantage (£369 saving). Scotland with Plan 4 produces £1,159/year less take-home than rUK with Plan 2.

Effective combined rate

Total deductions: £9,014 + £2,994 + £1,674 = £13,682.

Effective combined rate: £13,682 / £50,000 = 27.4%.

For comparison, rUK with Plan 2 is £12,523 / £50,000 = 25.0%.

Practical interpretation

A Scottish graduate on Plan 4 at £50,000 takes home £36,318 per year — £97 less per month than an equivalent rUK graduate on Plan 2. The Plan 4 threshold advantage (repayments start £4,100 higher) partially offsets the Scottish income tax premium, but not fully. At this salary the Scottish income tax cost dominates.

Both variables need to be set correctly in the calculator. Using the rUK tax setting or Plan 2 for a Scottish Plan 4 borrower would overstate take-home by over £1,100/year.

Use the take-home pay calculator with both Scotland and Plan 4 selected, then read Student loans and take-home pay, explained properly and Scotland vs rest of UK tax.