Your self-employment
Your circumstances
Total monthly income = Universal Credit + your actual self-employed earnings.
Estimated monthly Universal Credit £629. Total monthly income £1,229 per month.
The Minimum Income Floor
| Your actual earnings (income − expenses) | £600.00 |
| Minimum Income Floor used by UC | £1,698.84 |
| Earnings used for your UC | £1,698.84 |
Minimum Income Floor based on 35 hours/week × £12.71 minimum wage, after notional tax and National Insurance.
The Minimum Income Floor applies. UC treats you as earning £1,699 a month even though you actually took home £600 — so your UC is lower than your real earnings would suggest. If your business genuinely can't reach this level, it may be worth checking whether you are still considered gainfully self-employed.
Start-up period vs Minimum Income Floor
| If the start-up period applies (assessed on £600) | £1,233.69 |
| If the Minimum Income Floor applies (assessed on £1,699) | £629.33 |
| Difference per month | £604.36 |
During your first 12 months (start-up period) UC uses your actual earnings. After that, if you are still gainfully self-employed, the Minimum Income Floor applies and your UC can drop by around £604 a month at this level of earnings.
How your payment is calculated
| Maximum UC | £1,328.84 |
| Earnings used (after work allowance of £427) | £1,271.84 |
| Less earnings taper (55%) | −£699.51 |
| Monthly UC payment | £629.33 |
Example self-employed UC scenarios
Same household as yours, different earnings. Tap to load a scenario.
Frequently asked questions
What is the Minimum Income Floor?
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.
How are self-employed earnings worked out for Universal Credit?
UC assesses your self-employment monthly on a cash basis: the money your business actually received in the assessment period, minus permitted business expenses. Unlike Self Assessment, it is not based on your annual profit, so months with high income reduce your UC more, and you cannot carry a loss forward (though surplus earnings rules can apply).
What is the start-up period?
When you first become gainfully self-employed you usually get a 12-month start-up period. During this time the Minimum Income Floor does not apply and UC uses your actual earnings, giving a new business room to grow. You normally get a start-up period once every five years.
Am I “gainfully self-employed”?
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.
How much does the Minimum Income Floor reduce my Universal Credit?
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.
Related calculators & guides
Sources — official UK figures
A simplified estimate for self-employed UC claimants using 2026/27 rates. The Minimum Income Floor here uses 35-hour-style expected hours × the National Minimum Wage for your age, less notional tax and National Insurance; your actual individual threshold is set by your work coach. It does not model surplus earnings, the benefit cap, Local Housing Allowance limits, non-dependant deductions, or how each assessment period is reported. For an official figure use the GOV.UK benefits calculators or contact Citizens Advice.