In this section:

Which state benefits to report when making a tax credits claim
Working out income from employment for your tax credits claim
Working out benefits from your employer for your tax credits claim
Working out income from self-employment for your tax credits claim
Working out other income for your tax credits claim
Working out usual working hours for your tax credits claim
Working out childcare costs for your tax credits claim

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Working out income from employment for your tax credits claim

Working out income from employment for your tax credits claim

When we work out your tax credits award - the amount of money you'll get - we look at your income for the last tax year. A tax year runs from 6 April one year to 5 April the next.

Working out your income

This is a three-step process:

Step 1: how much money came in
Step 2: what you need to take off this
Step 3: what did you have left?

For help working out your income, use the worksheet in the notes that came with your tax credits claim form or renewal pack, or call the Helpline on Tel 0845 300 3900 or textphone 0845 300 3909.

Download notes on making a tax credits claim (PDF 667K)

Step 1: how much money came in

First take your total wages from all jobs that you had in the last tax year, before taking off tax and National Insurance. This is known as your gross pay.

Where to find details of your pay

Your employer should have given you a record of your gross pay. This will be a P60 or P45 if you left before the end of the tax year. If you had only one job in the last year, use the number labelled ‘Total for the year’ on your P60 or ‘Total pay to date’ on your P45.

These forms will include any Statutory Sick Pay, and Statutory Maternity, Paternity or Adoption Pay you got in the year, which are included in your total pay.

If you didn't get a P60 or P45, check your final payslip, which should show your total pay to date.

Add up the totals on the forms to work out your total gross pay.

You must also include any money you were paid from working outside the UK. You need to enter the amount in British pounds not the foreign currency.

Employee benefits

You'll also need to include certain benefits that you got from your employer that were taxed, like goods your employer gave you, bills they paid for you and a company car. Your employer will give you a P11D or P9D form at the end of the tax year which will show the taxable value.

Find out which benefits from your employer to include

What else to include

As well as your total pay, you need to add:

tips
money you got because your job ended or changed, and which was taxed
strike pay from your trade union
money you made from stocks and shares that you got from your employment
payments for any work you did whilst serving a sentence in prison or on remand.

You don't need to show any tax credits from last year, or any New Deal 50 plus Employment Credits you got.

Take off any Gift Aid or pension payments you made into a scheme registered with HM Revenue & Customs (HMRC).

Download our help sheet on tax credits relief for Gift Aid donations, pension contributions and trading losses (PDF 250K)

Step 2: what you need to take off this

Add up:

Any payments you made to charity through a Give As You Earn (GAYE) scheme, unless your employer took them off.
£100 for each week you got Statutory Maternity, Paternity or Adoption Pay.
Money you had to pay out to do your job and which your employer didn't pay back to you. Include travel costs, but not the cost of getting to and from work.
Tax-deductible payments which are deductible for Income Tax purposes, for example fees and subscriptions to professional bodies or societies, employee liabilities and indemnity insurance premiums, and agency fees paid by entertainers. Do not deduct these payments if your employer reimbursed them.
Flat-rate expenses agreed by your employer and HMRC, to maintain or renew tools or special clothes, for example a uniform, that are necessary to do your job. You will find the amount of allowable expenses on your P2 Coding Notice.
What you paid into a registered pension scheme including a stakeholder pension and any Free-Standing Additional Voluntary Contributions. Don't show anything that was taken from your wages.

Step 3: what did you have left?

Take the Step 2 total from the Step 1 total to show your total income and put this on your tax credits claim form or Annual Declaration form in the section on income.

Tell us about changes in the money you get

You need to tell us straight away if you expect to have more or less money coming in this year, so that we can make sure you don't get too much or too little in the way of tax credits.

What to do when your income changes

Contact us

You can contact our Tax Credit Helpline on Tel 0845 300 3900 or textphone 0845 300 3909 (open from 8.00 am to 8.00 pm seven days a week except Christmas Day, Boxing Day and New Year's Day).