Guidance

Universal Credit: information for employers

Information for employers on how Universal Credit and earnings are worked out, employers' responsibilities and support available.

Applies to England, Scotland and Wales

How Universal Credit and earnings are worked out

When a claimant starts work, the amount of Universal Credit they get will gradually reduce as they earn more. This means their income will be their earnings plus their Universal Credit.

The more a claimant earns, the higher their total income will be. This happens until they earn a certain amount through work, when their Universal Credit will stop. We will tell claimants when this happens.

Some claimants, depending on their circumstances, are eligible for a ‘work allowance’. That’s an amount that they can earn before their Universal Credit is affected.

There is no limit to how many hours a claimant can work. This means a claimant’s Universal Credit will not necessarily be stopped if they:

  • work more than 16 hours a week
  • work extra hours
  • get bonus payments
  • get overtime
  • have more than one job
  • are on a zero-hours contract

If the claimant earns a different amount each month, their Universal Credit will automatically adjust to reflect the amount they earn in that time:

  • if someone’s earnings reduce in a month then their Universal Credit will usually increase
  • if their earnings increase, their Universal Credit will usually reduce

Find out how earnings affect Universal Credit.

As part of claiming Universal Credit, claimants may be asked to look for ways to increase their earnings. This could be by:

  • taking on more work
  • progressing in their current workplace
  • searching for additional or alternative work with different employer

Employers: your responsibilities

You do not need to treat Universal Credit claimants any differently to your other employees.

You do not need to tell DWP about any employees who are getting Universal Credit.

If you are a PAYE (Pay As You Earn) employer, you must:

  • give the claimant’s PAYE information (their ‘Full Payment Submission’ (FPS)) to HMRC on or before the day they’re due to be paid
  • enter the usual date that you pay your employees on your FPS, even if you pay them on a different date because their normal date falls a non-banking day, for example a weekend or a bank holiday

Incorrect or late information could mean claimants will not receive the Universal Credit they are expecting.

DWP will then get the claimant’s work status and automatically work out what Universal Credit they’re entitled to based on the information you’ve already given to HMRC.

If you are not a PAYE employer, it is the claimant’s responsibility to report their take home pay to Universal Credit each month.

Other support

Jobcentre Plus has recruitment services that can help employers. Find out about Jobcentre Plus help for recruiters.

If a claimant has a query they can:

Published 30 September 2022