What is the Universal Credit taper rate?

The taper rate is 55%, meaning 55p of Universal Credit is withdrawn for every £1 of net earnings above your work allowance. Earnings up to the work allowance are ignored entirely, and the taper only ever reduces UC to zero, never below.

What is the work allowance?

The work allowance is the amount you can earn each month before the taper starts. It applies only if you are responsible for a child or have limited capability for work. The higher rate (around £673) applies if your UC does not include housing support, and the lower rate (around £404) if it does.

Do all claimants get a work allowance?

No. If you have no children and no limited capability for work, your work allowance is £0 and the 55p taper applies from your very first pound of earnings. Select the None option in the tool to model this situation.

Are gross or net earnings used?

Net earnings after Income Tax, National Insurance and any pension contributions are used in the taper. Universal Credit takes earnings figures from PAYE Real Time Information, so the calculator asks for net monthly earnings to match the official method.

Will I always be better off working?

Generally yes. Because only 55p of each £1 above the work allowance is removed, you keep at least 45p of every extra pound earned, plus all earnings within the work allowance. However, the benefit cap, capital over £6,000, and other deductions can affect the final amount.

UK Universal Credit Earnings Taper Calculator

Universal Credit does not stop the moment you start working — instead it tapers away gradually as earnings rise. This calculator applies the DWP’s 55p taper to your net earnings above the work allowance and shows the resulting UC payment and your total monthly income, so you can see how extra hours actually affect your budget.

How it works

Universal Credit is a monthly calculation:

earningsAboveAllowance = max(0, netEarnings − workAllowance)
reduction              = earningsAboveAllowance × 0.55
ucPayment              = max(0, maxUC − reduction)
totalIncome            = ucPayment + netEarnings

The work allowance is £673 if your UC does not include housing support, £404 if it does, and £0 if you have no children and no limited capability for work. Earnings within the allowance do not reduce UC at all.

Example and notes

Suppose your maximum UC is £900, you net £1,200 a month, and your work allowance is £673. Earnings above the allowance are £527, so the taper removes £527 × 0.55 = £289.85. Your UC payment is £900 − £289.85 = £610.15, and your total income is £610.15 + £1,200 = £1,810.15.

Notes: because you keep 45p of every taxed pound above the allowance, working almost always increases total income. The benefit cap, capital above £6,000, and deductions for debts or advances can change the outcome, so treat this as an estimate rather than an official award notice.