What is the Universal Credit minimum income floor?

What the minimum income floor is

The minimum income floor is a set level of earnings that DWP assumes some self-employed people make each month. It is used to work out Universal Credit.

• If you earn less than your floor, DWP works out your Universal Credit as if you had earned the floor. Your payment will be lower than if it used your real earnings.
• If you earn more than your floor, DWP uses your actual earnings.

It stops Universal Credit making up for a business that earns very little, so you may need to find extra work to top up your income.

Who it applies to

It only applies if both of these are true:

• you are "gainfully self-employed"
• you are not in a start-up period

The law says it applies to self-employed people who are expected to do all work-related activity, such as looking for work.

Gainful self-employment

At a gainful self-employment interview, DWP checks that self-employment is your main job or main source of income. Evidence can include:

• tax returns and your Unique Taxpayer Reference (UTR)
• lists of customers and suppliers
• receipts and invoices
• advertising or marketing material

How it is worked out

The floor is what an employed person in a similar situation would earn on the National Living Wage or National Minimum Wage, after tax and National Insurance.

DWP takes:

1. your expected hours a week (usually 35)
2. multiplied by the minimum wage for your age
3. multiplied by 52 and divided by 12, to make a monthly figure
4. minus an amount for tax and National Insurance

Your expected hours can be lower if, for example, you care for a young child or have a health condition or disability.

Example (before tax and National Insurance): Sam is 40 and expected to work 35 hours a week. From April 2026 the National Living Wage for people aged 21 and over is £12.71 an hour.

• 35 hours x £12.71 = £444.85 a week
• £444.85 x 52 ÷ 12 = £1,927.68 a month

DWP then takes off an amount for tax and National Insurance to get Sam's floor. If Sam's business makes less than that in a month, his Universal Credit is worked out as if he earned the floor.

Couples

If you are in a couple, you each have your own minimum income floor, based on your own circumstances.

The start-up period

If you have just started your business, you may get a start-up period of up to 12 months. During it, DWP uses your real earnings and the floor does not apply. You must:

• go to appointments with your work coach every 3 months
• show you are still gainfully self-employed
• show the steps you are taking to grow your earnings

You can only get another start-up period if it has been more than 5 years since your last one, and the new business is in a different trade, profession or vocation.

How to report your earnings

Report your self-employed earnings in your Universal Credit account every month. Report it even if you earned nothing. Include money coming in and going out of the business, and any pension contributions you paid.

If you live in Scotland, Wales or Northern Ireland

The minimum income floor works the same way in England, Scotland and Wales. Northern Ireland runs Universal Credit separately, so check nidirect.

Related guides

• How does Universal Credit work if you're self-employed?
• How does working affect my Universal Credit?
• How much Universal Credit will I get?
• How do I become a sole trader?

Where this comes from

• Self-employment and Universal Credit (GOV.UK)
• Claiming Universal Credit when you are self-employed (DWP)
• National Minimum Wage and National Living Wage rates (GOV.UK)
• Universal Credit Regulations 2013, regulation 62 (minimum income floor) (legislation.gov.uk)
• Universal Credit Regulations 2013, regulation 63 (start-up period) (legislation.gov.uk)
• Universal Credit Regulations 2013, regulation 88 (expected hours) (legislation.gov.uk)
• Universal Credit Regulations 2013, regulation 90 (earnings thresholds) (legislation.gov.uk)