Universal Credit Self-Employed Calculator 2026/27

The Minimum Income Floor (MIF) is an assumed level of earnings UC applies if you are gainfully self-employed and past your start-up period. It is usually your expected weekly hours (often 35) times the National Minimum Wage for your age, less notional tax and National Insurance. If you earn less than the MIF, UC still treats you as earning it — so your award is based on the floor, not your real profit.

Universal Credit assesses self-employed earnings for each monthly assessment period — the money your business received, minus allowable deductions such as permitted expenses and the tax, National Insurance and pension contributions you paid — not your annual profit. Unused losses from earlier assessment periods while you have been on Universal Credit can reduce later profits. The Minimum Income Floor is checked after losses are deducted, so if it applies, a carried-forward loss can be used up without increasing your Universal Credit payment.

If you are newly gainfully self-employed, your work coach may confirm a start-up period of up to 12 months. During it the Minimum Income Floor does not apply and UC uses your actual earnings, giving a new business room to grow. It is not automatic: you need to be taking active steps to increase your earnings, it is normally only available if you have not been gainfully self-employed on Universal Credit before, and being in your first year of business does not on its own mean it applies. Another start-up period is only possible after five years, and only for a different trade.

You are gainfully self-employed if self-employment is your main job, you work at it regularly and you organise it to make a profit. Your work coach decides this at an interview. If you are not gainfully self-employed, the Minimum Income Floor does not apply and you may have other work-related requirements instead.

Above your work allowance, every £1 of (assumed) earnings reduces UC by 55p. So if the MIF assumes you earn more than you really do, your UC drops by 55p for each pound of the gap. For some low-earning self-employed people the MIF can reduce UC to zero, which is why it catches people out.

You can deduct permitted business expenses paid in the assessment period — costs that are wholly and exclusively for the business, such as stock and materials, business travel, tools and equipment, business insurance, and a flat-rate amount if you work from home or use a vehicle. You also deduct the tax, National Insurance and pension contributions you actually paid that month. Personal spending and capital repayments on business loans generally do not count.

Yes. You must report your business income and expenses to UC at the end of every assessment period, usually within 7 days, even in months where you earned nothing. Your award for that month is only calculated once you have reported, so missing the deadline can delay or stop your payment.