Working Tax Credit Calculator UK 2025
Estimate your Working Tax Credit entitlement for 2025/26 based on household income, hours worked, family circumstances, and disability status. Important: WTC is being replaced by Universal Credit. If you receive a Migration Notice, you must claim UC within 3 months. Use our calculator to understand your current WTC award and what to expect from the transition.
Working Tax Credit Estimator 2025/26
Working Tax Credit Elements & Annual Rates 2025/26
| Element | Annual Rate 2025/26 | Who Qualifies |
|---|---|---|
| Basic element | £2,435 | All eligible claimants |
| Couples element | £2,500 | Couples (instead of basic element for the second adult) |
| 30-hour element | £1,015 | Working 30+ hours per week |
| Disability element | £3,935 | Qualifying disability, registered disabled, or receiving qualifying benefit |
| Severe disability element | £1,705 | Receiving certain severe disability benefits (in addition to disability element) |
| Childcare element | 70% of costs | Max £175/wk (1 child) or £300/wk (2+ children) |
| Income threshold | £7,455 | Taper rate: 41p reduction per £1 above threshold |
What Is Working Tax Credit?
Working Tax Credit (WTC) is a means-tested benefit administered by HMRC that provides financial support to working people on low incomes. It was introduced in 2003 as a replacement for Working Families' Tax Credit and has formed a crucial part of the UK's in-work support system for over two decades. WTC is paid in addition to Child Tax Credit (CTC) for families with children, though the two credits are assessed and awarded together through the tax credits system.
Unlike many other benefits, WTC is paid directly by HMRC through a tax credit system based on annual income assessment. Awards are initially based on the previous year's income and then adjusted (renewed annually) when claimants report their actual income for the year. Underpayments and overpayments occur as a result, and tax credit overpayment debt is a significant issue for many lower-income households.
Universal Credit Migration: What You Need to Know in 2025
The most important fact for current Working Tax Credit claimants in 2025 is that WTC is being replaced by Universal Credit (UC) under the government's welfare reform programme. New claims for WTC have not been possible since April 2019. Existing claimants are being moved to Universal Credit through a process called Managed Migration.
HMRC sends Migration Notices to existing tax credit claimants on a rolling basis. The notice gives claimants three months to make a Universal Credit claim. Those who claim UC within the three-month window may be entitled to Transitional Protection — a top-up payment that ensures their UC award is no less than their previous tax credits award at the point of migration (in cash terms, not accounting for future rises). Those who miss the three-month deadline lose entitlement to Transitional Protection and may receive less on UC.
The government planned to complete the full migration of tax credit claimants to Universal Credit by December 2025, though timelines have shifted previously. If you are still receiving Working Tax Credit in 2025 and have not yet received a Migration Notice, it is advisable to monitor your post carefully and contact the Tax Credit Helpline if you have any concerns.
Who Qualified for Working Tax Credit?
To have been eligible for WTC before the closure to new claims, a person had to be aged 16 or over, working in paid employment or self-employment for the minimum required hours, and have income below the relevant thresholds. The minimum hours requirements varied significantly by circumstances: single people without disabilities needed to work at least 30 hours per week; single parents needed at least 16 hours; couples with children needed at least one partner working 16 hours; and people aged 60 or over, or with a qualifying disability, needed only 16 hours.
Working Tax Credit was also available to the self-employed, provided the self-employment was genuine commercial activity undertaken with a view to profit, and the hours and income conditions were met. HMRC could challenge self-employment claims where the number of hours or level of income appeared implausible.
How the WTC Award Is Calculated
WTC is calculated by adding together the elements that apply to your circumstances to arrive at a maximum annual award. This maximum is then reduced by the taper rate — 41 pence for every £1 of household income above the threshold (£7,455 in 2025/26). For example, a single parent working 25 hours per week with no disability would qualify for the basic element (£2,435) only. With income of £16,000, the reduction is (£16,000 - £7,455) x 0.41 = £3,504. Since £3,504 exceeds the maximum award of £2,435, this person would receive no WTC at that income level.
The same calculation applies to the interaction with Child Tax Credit — the taper applies to the combined WTC and CTC award. This is why families with children can often receive some tax credits at much higher income levels than working adults without children.
Universal Credit vs Working Tax Credit: Key Differences
Universal Credit and Working Tax Credit differ in several important ways. UC is assessed monthly based on actual earnings in that month (via the Real Time Information system), whereas WTC was assessed annually based on the previous year's income, with adjustments on renewal. This means UC responds more quickly to changes in income — which can be beneficial when income falls but creates instability when income varies month to month.
UC's childcare element is more generous — covering up to 85% of eligible childcare costs compared to WTC's 70%. However, UC claimants must pay the childcare provider first and then claim reimbursement, whereas WTC childcare element was factored into the weekly or four-weekly payment automatically. UC also includes a work allowance for some claimants — an amount that can be earned before the UC award starts to reduce — which did not exist under the legacy tax credits system in the same form.
Getting Help with the UC Transition
The transition from WTC to Universal Credit can be confusing and stressful. The following resources provide free, independent advice: Citizens Advice (www.citizensadvice.org.uk), Turn2Us benefits calculator (www.turn2us.org.uk), and the government's own Universal Credit guidance at gov.uk. HMRC's Tax Credit Helpline is 0345 300 3900. If you are moving to UC and are concerned about your financial position, seek advice before your three-month deadline expires to ensure you receive Transitional Protection where applicable.
Frequently Asked Questions
Can I still claim Working Tax Credit in 2025?
If you are already receiving WTC, you will continue until you receive a Migration Notice from HMRC. New claims for WTC are no longer accepted — anyone who would previously have been eligible must now claim Universal Credit instead. Once you receive a Migration Notice, you have 3 months to claim UC. Missing this deadline means losing Transitional Protection and potentially receiving less.
What are the Working Tax Credit elements and rates for 2025/26?
WTC 2025/26 annual rates: Basic element £2,435; Couples element £2,500; 30-hour element £1,015; Disability element £3,935; Severe disability element £1,705; Childcare element: 70% of eligible costs (max £175/week for one child, £300/week for two or more). Awards are reduced by 41p per £1 of income above the £7,455 threshold.
How many hours do I need to work to qualify for Working Tax Credit?
Minimum hours vary by circumstances: Single person (no children/disability): 30 hours/week. Single parent: 16 hours/week. Couple with children (at least one partner): 16 hours/week. Couple without children: both must work, together at least 30 hours (one must work 16+). Person aged 60+ or with qualifying disability: 16 hours/week. The 30-hour element (£1,015/year extra) requires working 30+ hours regardless of other circumstances.
What is the Migration Notice for Universal Credit?
A Migration Notice is a letter from HMRC stating your tax credits will stop and you must claim Universal Credit. You have 3 months from the date on the letter to claim UC. If you claim in time, you may receive Transitional Protection — a top-up ensuring you receive no less than your current WTC award. If you miss the deadline, your WTC stops and Transitional Protection is lost. Contact Citizens Advice if you are struggling with the process.
Will I be better or worse off on Universal Credit than Working Tax Credit?
It depends on your circumstances. People who may be better off on UC: those with high childcare costs (UC covers 85% vs WTC's 70%), those with varying income, and some with limited work capability. People who may be worse off without Transitional Protection: those receiving disability or severe disability elements. Use the Turn2Us or Citizens Advice calculator for a personalised comparison. Always seek advice before your Migration Notice deadline expires.
What is the income threshold for Working Tax Credit?
WTC starts to reduce when household income exceeds £7,455 per year (2025/26). For every £1 above this threshold, WTC reduces by 41p. A single person with only the basic element (£2,435 maximum) receives no WTC once income exceeds approximately £13,393. A couple with the basic plus couples element (£4,935 maximum) receives no WTC above approximately £19,460. Disability elements extend the income range at which WTC tapers to zero.
What happens to my childcare element when I move to Universal Credit?
WTC's childcare element covers 70% of eligible costs (max £175/week for one child, £300/week for two+). UC's childcare element covers 85% of eligible costs (max £1,014.63/month for one child, £1,739.37 for two+). UC requires you to pay the childcare provider first, then claim reimbursement — unlike WTC which was included automatically in your payment. Higher childcare costs are a key reason many families are better off on UC than legacy tax credits.