Universal Credit and employers

4. For HR and payroll staff

Universal Credit can help at every stage of the recruitment and employment process.


Universal Credit helps you in your recruitment process because it:

  • provides better prepared applicants – jobseekers will receive job preparation, digital and budgeting skills and will be financially more ready for the world of work, coming from a monthly payment system
  • provides a wider pool of applicants – Universal Credit claimants will be more open to short-term, part-time or irregular work
  • only reduces gradually on starting work – jobseekers will be more willing to take work because they usually won’t lose all their benefits at once (the ‘16 hour rule’ has gone)
  • helps with childcare, even before taking up a job offer – working parents can claim back up to 85% of paid out registered childcare costs, up to a monthly limit of £646.35 for one child, or £1108.04 for two or more children. This will allow experienced returners to the labour market to work around their childcare commitments.

Managing your workforce

Universal Credit helps you manage natural peaks and troughs within your business. Universal Credit claimants on your workforce will be able to:

  • be flexible about their hours – employees won’t have to worry about their claim, any change in earnings will mean their Universal Credit adjusts automatically. They can accept offers of overtime or more hours, helping you to avoid the overheads associated with recruiting and training new staff.
  • increase to full-time hours – employees will be able to do this, for example over the busy Christmas period. They will be automatically notified if their higher earnings mean their Universal Credit stops, but if their hours reduce within 6 months it’s easy for them to get Universal Credit again.
  • accept any bonuses offered – although a bonus could temporarily reduce or stop an employee’s Universal Credit payment, it’s easy for them to get Universal Credit again.


The PAYE information you send to HMRC is forwarded to DWP to be taken into account when calculating a claimant’s next Universal Credit payment.

Graphic of clock and calculator with text: Universal Credit uses PAYE real time information you already submit, so there's no additional paperwork

It’s crucial that employers file accurate and timely PAYE information. Incorrect or late information could result in claimants not receiving the Universal Credit payment they are expecting.