How your earnings affect your payments

If you or your partner are employed, how much Universal Credit you get will depend on how much you earn. Your Universal Credit payment will reduce as you earn more. For every £1 you or your partner earns your payment goes down by 55p.

There are different rules if you’re self-employed.

There’s no limit to how many hours you can work. Your Universal Credit does not stop if you work more than 16 hours a week.

Use a benefits calculator to see how increasing your hours or starting a new job could affect what you get.

Most employers will report your earnings for you. You will normally only need to report monthly earnings if you’re self-employed.

The work allowance

You can earn a certain amount before your Universal Credit is reduced if you or your partner are either:

This is called a ‘work allowance’. Your work allowance is lower if you get help with housing costs.

Your circumstances Monthly work allowance
You get help with housing costs £344
You do not get help with housing costs £573

Example

You have a child and get money for housing costs in your Universal Credit payment. You’re working and earn £500 during your assessment period.

Your work allowance is £344. This means you can earn £344 without any money being deducted.

For every £1 of the remaining £156 you get, 55p is taken from your Universal Credit payment. So £156 x £0.55 = £85.80.

This means you earn £500 and £85.80 is deducted from your Universal Credit.

How often you’re paid can affect your Universal Credit

If you’re paid once a month on the same date and nothing changes in your earnings, then your Universal Credit amount should stay the same.

Your Universal Credit can be affected if you receive no wages or more than one set of wages during some assessment periods. This could happen if:

  • you’re paid weekly, every 2 weeks or every 4 weeks
  • your monthly payment date changes, for example you get paid on the last working day of each month

If your monthly payment date changes

You’ll need to sign into your online account to check how much your next monthly payment will be. If it looks like you’ll get paid too much or too little Universal Credit, ask your work coach to consider moving your wages into another assessment period.

If you’re paid weekly, every 2 weeks or every 4 weeks

You’ll be told if your earnings are too high and whether you’ll need to reapply to continue to get Universal Credit.

How often you’re paid by your employer The impact
Every 4 weeks Once a year, you’ll get 2 sets of wages in one assessment period
Every 2 weeks Twice a year, you’ll get 3 sets of wages in one assessment period
Every week Four times a year, you’ll get 5 sets of wages in one assessment period

If your payment stops because your earnings increased

As you or your partner’s income increases, your payment will reduce until you’re earning enough to no longer claim Universal Credit. Your payment will then be stopped. You’ll be told when this happens.

If your earnings decrease after this, you can claim Universal Credit again.