Net earnings (see below) from employment affect the amount of Universal Credit awarded - if the claimant's total net earned income is above their Work Allowance (click here) then their award of Universal Credit gets reduced by 55p for every pound in earned income they have above it.

For example: 
Steve works full time and has a 10 year old daughter, his net monthly wage is £1200. His work allowance is £404.00. His earnings will reduce his Maximum UC award by £1,200 - £404.00 x 0.55 = £451.55

Net earnings - 

To work out the claimant's net earnings the DWP will deduct any:

• Tax
• National Insurance
• 100% of any contribution to an occupational pension scheme
• Any charity payments under a payroll giving scheme approved by HMRC

No other deductions will be ignored - for example if they pay subs to a union or are part of a Christmas saving scheme.

NOTES:

Statutory Sick Pay and Statutory Maternity, Paternity and Adoption Pay count as earnings
Certain expenses do not count as earnings - including those that are 'wholly, exclusively and necessarily' incurred as part of the duties of employment and mileage expenses.
Redundancy payments count as savings rather than earnings