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How earnings are defined in benefits and tax credits

The calculator needs to know about your earnings in order to make a correct estimate of your entitlements. The way earnings are defined is different in benefits and tax credits:

Tax Credits

When calculating tax credits your gross annual earnings for the previous tax year are used. The tax year runs from 6 April one year to 5 April the next year. Gross earnings are the amount you get before any tax and National Insurance is paid.

If your earnings are considered to be too low, checks may be carried out to see whether your self employment is viable. See our Gainful Self-employment page for further information.


Universal Credit is worked out using your assessment period of one month from the date you claimed. More information is available on our Universal Credit and earnings help page.

For most other benefits, when calculating your award net current weekly earnings are used. This is essentially the amount you received in the last week as take home pay after tax and National Insurance was paid.

To make it easier to work out your net earnings we calculate the tax and national insurance due. So all you need to do is enter your gross earnings (the amount before tax and National Insurance is paid) and we will do the calculations. You can normally find out your gross earnings from your payslip.