Employment Allowance

Employers can reduce the amount of National Insurance contributions (NICs) they pay for their employees by up to £3,000. This is called the ‘Employment Allowance’.

You won’t have to pay any employer National Insurance contributions at all if you usually pay less than £3,000 a year.

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

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 - including for a previous tax year, dating back to 2014 to 2015. Employment Allowance was £2,000 before 6 April 2016.

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