Employment Allowance

Employers can reduce the amount of National Insurance contributions (NICs) they pay for their employees by up to £2,000. This is called the ‘Employment Allowance’.

Employment Allowance can be claimed from 6 April 2014.

You won’t have to pay any employer National Insurance contributions at all if you usually pay less than £2,000 a year.

Up to 1.25 million businesses and charities will benefit from Employment Allowance. Around 450,000 businesses and charities won’t have to pay any employer National Insurance contributions at all.

Use the Employment Allowance calculator to see how the allowance could affect your contributions.

Eligibility

Employment Allowance is for nearly all employers that pay Class 1 National Insurance contributions on their employees’ and directors’ earnings. This includes:

There are a small number of businesses and organisations that can’t claim Employment Allowance.

How to claim

You can claim through your payroll software.

Find out more about claiming Employment Allowance and what the government is doing to make it easier to set up and grow a business.

*Image from the Press Association