Self-Employed & Student Loans
Mastering the January tax bill when you're your own boss.
The January Pay-day Surprise
Unlike employees who pay via PAYE monthly, the self-employed pay their student loan once a year through **Self Assessment**. HMRC calculates your repayment based on 9% of your total profit above the threshold.
Watch out for: Payments on Account
Student loan repayments are **not** included in "Payments on Account." You pay the full amount for the year in one go on January 31st. You must budget for this throughout the year to avoid a massive cash flow shock.
Double Payments & The Final Year
If you are in your final year of repayment, the Self Assessment system might over-calculate your bill because it doesn't know your live balance. To avoid this:
- Switch to Direct Debit at least 12 months before your loan is due to finish.
- Inform HMRC on your tax return that you are nearing completion to prevent excessive deductions.