Universal Credit Calculator

Universal Credit (UC) is calculated by adding a standard allowance (based on age and relationship status) plus additional elements for children, housing costs, caring responsibilities and disability. Your payment is then reduced based on your earnings through a taper rate of 55%.

The work allowance lets you earn a set amount before the taper applies: £404/month if your UC includes no housing element, or £673/month if it does not include housing. For every £1 you earn above the work allowance, your UC is reduced by 55p.

This calculator estimates your UC entitlement based on your household composition, income, housing costs and circumstances. Actual entitlements depend on a full assessment by the DWP and may differ from estimates.

Universal Credit base rates 2026/27. Standard allowance (monthly): Single under 25 £316.98, Single 25+ £400.14, Couple both under 25 £497.55, Couple at least one 25+ £628.10. Plus optional elements: Child (£339.00 first child if born before 6 April 2017; £292.81 first born after; £292.81 per additional child); Childcare costs up to 85% reimbursed (max £1,031 for one child, £1,768 for two); Limited Capability for Work £156.11; Carer Element £198.31; Housing Costs (variable by LHA rate).

The work allowance and taper rate. If you have responsibility for children or limited work capability, you have a work allowance: £404/month (without housing costs) or £673/month (with housing costs). Earn this much before UC reduces. Beyond the allowance, UC reduces by 55p for every £1 of net earnings (the taper). For people without children/capability, the taper applies from the first pound earned. This creates effective marginal tax rates of 75-80% for some workers — a long-standing welfare-to-work problem.

Transitional Protection for legacy benefit migration. If you're moved from Tax Credits, ESA, Income Support, JSA, or Housing Benefit to UC (managed migration), you receive Transitional Protection — your UC must be at least as much as your old benefits, with the difference paid as a top-up that erodes over time. This protection is not paid if you voluntarily migrate or if your circumstances change significantly. Managed migration is being rolled out 2024-2028.

Common UC mistakes. (1) Capital limit £16,000 — anything above ends your claim. Includes savings, second properties (not main home), investments. £6,000-£16,000 is tariff income (£4.35/month per £250 over £6,000). (2) Self-employed minimum income floor — if you're self-employed >12 months, UC assumes you earn 35×NMW per week even if you actually earn less. (3) Childcare reimbursement is paid AFTER you pay the nursery — many parents struggle with cashflow. (4) Surplus earnings rule — earning above the threshold in one month rolls over into next month's calculation.

Standard allowances 2026/27. Monthly: Single under 25 £316.98; Single 25+ £400.14; Couple both under 25 £497.55; Couple at least one 25+ £628.10. Plus additional elements: Child £339 (first born pre-April 2017) or £292.81 (post-2017 + additional children); Childcare costs up to 85% reimbursed (£1,031 max single child, £1,768 two+); Limited Capability for Work £156.11; Carer Element £198.31; Housing Costs (variable by LHA rate).

Work allowance and taper rate. If you have responsibility for children or limited capability for work: work allowance £404/month (no housing costs) or £673/month (with housing). Earn this much before UC reduces. Beyond allowance, UC reduces by 55p for every £1 of net earnings. For people without children or capability: taper applies from first pound earned. Effective marginal tax rates 75-85% — long-standing welfare-to-work problem.

Capital limits and tariff income. Capital under £6,000: ignored. £6,000-£16,000: 'tariff income' applies — UC reduces by £4.35/month per £250 over £6,000. Capital over £16,000: ends your UC claim entirely. Capital includes: savings, investments, second properties, business assets. Excluded: main home, personal possessions, certain disability-related capital. ISAs and pension pots: counted as capital while pre-retirement.

Self-employed minimum income floor. If trading 12+ months: UC assumes you earn 35 × NMW per week (£444.85 in 2026/27) even if actual earnings are lower. Prevents people 'underemploying' themselves to claim UC. Start-up period exemption: first 12 months self-employed exempted from MIF if business is your main income source. Strategy: many self-employed claim UC only in start-up year, then switch to higher actual earnings or close business.