3. Earnings

Your gross earnings from the last full tax year, plus those of your partner, are taken into account in the tax credit assessment. ‘Gross earnings’ means all income before any income tax or national insurance contributions are deducted. It also includes tips, overtime pay, taxable expenses and, ignoring the first £30,000, taxable payments related to the termination of employment such as redundancy pay and strike pay.1Reg 4 TC(DCI) Regs If you make any contributions to a personal or occupational pension approved by HM Revenue and Customs, these contributions should be disregarded.2Reg 3(7)(c) TC(DCI) Regs The first £100 a week of statutory maternity, paternity, shared parental and adoption pay is disregarded, but payments above this are included.3Reg 4(1)(h) TC(DCI) Regs Statutory sick pay is included in full.4Reg 4(1)(g) TC(DCI) Regs Any payments that are exempt from income tax should be ignored for the purposes of tax credits.