How do earnings affect Universal Credit?

In general, the amount you earn affects your Universal Credit (UC) allowance in the following way:

• For every £1 you earn, your UC allowance reduces by 55p

This is known as the 55% taper rate.

For example, suppose you’re entitled to a UC amount of £1,700:

• Standard allowance: £666.97
• Housing element: £1,033.03

Now, suppose you earn £1,000 a month. Your UC reduction will be calculated as follows:

• 1000 * 0.55 = 550

Which means your UC allowance of £1,700 is reduced by £550 and so you end up with £1,150.