# What is the Universal Credit work allowance?

> Quick answer · Last updated 4 July 2026

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## In short

The work allowance is the amount you can earn each month before Universal Credit reduces by 55p per £1 — it applies if you have children or limited capability for work. Higher and lower rates depend on whether housing costs are in your award.

Without a work allowance, earnings usually reduce UC from the first pound (subject to any surplus earnings rules).

The allowance helps make part-time work pay — use the UC calculator to model a specific job.

Childcare costs can be claimed separately up to 85% of eligible fees.

## Related

- [UC work allowance explained](https://moneyguide.org.uk/benefits-tax/universal-credit-work-allowance-explained/)
- [UC calculator](https://moneyguide.org.uk/tools/universal-credit-calculator/)

## Primary source

gov.uk/universal-credit

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.