Universal Credit calculator (UK)

Q: What is LHA and why does it matter?

LHA (Local Housing Allowance) is a maximum used for housing support in many private rent cases. If your rent is higher than the LHA rate for your area/bedroom size, UC may only cover up to that LHA limit.

Q: What is the 55% taper?

After any work allowance, Universal Credit is reduced by 55% of remaining earnings. Example: £100 above the allowance reduces UC by £55.

Q: What is a work allowance?

A work allowance is the amount you can earn before the taper applies, usually if you have children or LCWRA. If you’re unsure, this calculator assumes you qualify if you enter children.

Quick estimate including housing (optional LHA cap), child element, childcare element and the 55% taper.

Built for “is it worth working?” decisions — without judgement.

Quick guide

If your result surprised you, read the plain-English explanation of the UC taper.

UC taper explained

Recommended flow

Start: is it worth working? Then: childcare vs extra work Break-even helper

Household

Age band (standard allowance)

For couples, pick 25+ if either of you is 25+.

Children (number)

First child born before April 2017?

Monthly earnings (£)

This is used to estimate how earnings reduce UC via the taper.

Eligible monthly childcare costs (£)

We use 85% and apply caps.

Eligible monthly rent (£)

If you don’t claim housing costs, leave 0.

LHA cap (monthly) — optional (£)

LHA is the “Local Housing Allowance” limit for private rents. If you enter it, we cap housing at min(rent, LHA).

Find your LHA rate (official VOA tool)

Work allowance (plain-English)

Work allowance means you can earn some money before the UC taper starts. If unsure, we assume yes if you have children.

Hours per week (salary comparison)

Estimated Universal Credit (monthly)

£0.00

Estimate only. Real UC varies with deductions and other elements.

Maximum UC (before earnings taper)

£0.00

Standard allowance£0.00

Child element£0.00

Childcare element£0.00

Housing element (est.)£0.00

Earnings impact

Work allowance£0.00

Earnings above allowance£0.00

Taper deduction (55%)£0.00

Equivalent salary (rough)

Treats your UC estimate as “take-home” and estimates what gross salary would match it (England/Wales/NI only).

Equivalent take-home (monthly)

£0.00

Equivalent gross salary (year)

£0.00

Equivalent gross hourly

£0.00

Estimated annual tax£0.00

Estimated annual NI£0.00

Pick an annual salary — are you better off than UC?

Enter a gross salary and we’ll estimate take-home monthly and compare it to your UC estimate above. For childcare “real gain”, use the childcare calculator after.

Gross salary (year) (£)

(No pension / student loan in this estimate.)

Tip: try 18k / 22k / 30k and see the swing.

Optional: show “what hits your bank”

Other income that reduces UC (£ / month)

Examples: Carer’s Allowance, contributory ESA (some cases). (PIP does not reduce UC.)

Deductions from UC (£ / month)

Examples: advance repayments, sanctions, debt deductions.

Other income

£0.00

Deductions

£0.00

Adjusted UC (rough)

£0.00

Child maintenance you receive (CSA/CMS) does not reduce UC, so don’t enter it above.

How this calculator works (plain English)

1) Maximum UC. We add up the parts you might qualify for: standard allowance, child element, childcare element and housing element (rent, sometimes capped by LHA).

2) Work allowance (if you qualify). If you have children or LCWRA, UC ignores the first chunk of earnings each month. If your claim includes housing costs, that “ignored” chunk is usually lower.

3) The taper. After the allowance, UC is reduced by 55p for every £1 of earnings. That’s why an extra shift can look “not worth it” once childcare/travel is included.

This is an estimate: it does not include all deductions (e.g. sanctions, debt repayments, some other benefits, capital rules).

FAQ

What is a work allowance?

It’s the amount you can earn before the taper applies — usually only if you have children or LCWRA. If you claim housing costs, the allowance is usually lower.

What is the 55% taper?

After any work allowance, UC is reduced by 55% of earnings above it. Example: £100 above allowance reduces UC by £55.

What is LHA and why does it matter?

LHA (Local Housing Allowance) is a cap used in many private renting cases. If your rent is higher than your area’s LHA rate, UC may only cover up to that limit.

Does PIP or child maintenance reduce UC?

PIP does not reduce UC. Child maintenance you receive (CSA/CMS) does not reduce UC. But deductions like advance repayments, sanctions, or debt can reduce what you actually receive.

How Universal Credit is reduced when you work

Universal Credit is not stopped immediately when you start work, but it is reduced as your earnings increase. This reduction happens through the taper rate, which is currently 55%.

For every £1 you earn above your work allowance, your Universal Credit is reduced by 55p. If you do not have a work allowance, the taper applies from your first pound of earnings.

This is why many people feel that working extra hours “doesn’t pay” — because a large part of the extra income is offset by reduced Universal Credit.

Is it worth working on Universal Credit?

For some people, yes. For others, not always. Whether work is “worth it” depends on hours, work allowance, childcare, housing support, travel costs and deductions.

Two people on the same wage can end up hundreds of pounds apart once Universal Credit is factored in. This tool is designed to answer: “If I work, will I actually be better off?”

Common Universal Credit mistakes people make

assuming all earnings are kept
forgetting the 55% taper
ignoring childcare caps
not realising housing support can be limited by LHA
comparing wages without looking at take-home pay

Does PIP, CSA or child maintenance affect Universal Credit?

PIP/DLA do not reduce UC. Child maintenance you receive (CSA/CMS) does not reduce UC. But some things (like advances, sanctions and debts) can reduce what you actually receive — that’s why the optional adjustments exist.

Why small pay rises can feel pointless on Universal Credit

Once the taper applies, a pay rise doesn’t always translate into more money each month. Childcare and travel can wipe out the difference.

👉 If your “difference” looks small, use Childcare vs extra work to see your real gain per day.

Check childcare “real gain” Work vs benefits overview