What is the Minimum Income Floor for the self-employed on Universal Credit?

Full answer

The Minimum Income Floor (MIF) applies to Universal Credit claimants whom the DWP treats as being in 'gainful self-employment'. The idea is that UC will not indefinitely top up a business that earns very little. Once the MIF applies, the DWP assumes you earn a set minimum each month; if your actual self-employed earnings fall below that assumed figure, your UC is worked out using the floor, not your real (lower) income. If you earn above the floor, your actual earnings are used. How the floor is set: it is based on your expected hours of work (your 'individual threshold') multiplied by the National Living Wage or relevant minimum wage rate, with an allowance for tax and National Insurance deducted. For 2026/27 the National Living Wage for those aged 21 and over is GBP 12.71 an hour, which feeds into the calculation. Because each person's expected hours, age and circumstances differ, the exact monthly floor varies -- this guide does not quote a single figure; check your claimant commitment and gov.uk for your individual amount. Who it affects: established self-employed claimants. Crucially, new businesses get a 12-month start-up period during which the MIF does not apply, giving time to grow earnings. The MIF also does not apply if you are not treated as gainfully self-employed. Worked illustration of the mechanism: if your floor is assumed at, say, full-time hours and you have a bad month earning almost nothing, UC still treats you as having earned the floor, so your payment does not rise to cover the shortfall. In a good month earning above the floor, your actual higher earnings reduce UC in the normal way. To understand the tax side of self-employment income that feeds this, use a self-employed tax calculator, and check your personal MIF on gov.uk or with your work coach.

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