Employment Allowance

Employment Allowance

You could get up to £3,000 a year off your National Insurance bill if you’re an employer.

What you’ll get

The allowance will reduce your employers’ (secondary) Class 1 National Insurance each time you run your payroll until the £3,000 has gone or the tax year ends (whichever is sooner).

Eligibility

You can claim Employment Allowance if you’re a business or charity (including community amateur sports clubs) paying employers’ Class 1 National Insurance.

You can also claim if you employ a care or support worker.

If you have more than one employer PAYE reference, you can only claim Employment Allowance against one of them.

You can not claim if:

How to claim

o claim through your payroll software, put ‘Yes’ in the ‘Employment Allowance indicator’ field next time you send an Employment Payment Summary (EPS) to HM Revenue and Customs (HMRC).

If you use HMRC’s Basic PAYE Tools:

Stopping your claim

If you stop being eligible, select ‘No’ in the ‘Employment Allowance indicator’ field in your next EPS.

Do not select ‘No’ just because:

  • you’ve reached the £3,000 limit before the end of the tax year – this does not make you ineligible
  • you’re no longer employing anyone – wait until the next tax year, then select ‘No’

When to claim

You can claim at any time in the tax year.

If you claim late and do not use your Employment Allowance against the Class 1 National Insurance you’ve paid, you’ll have to ask HMRC to do one of the following:

You can see how much Employment Allowance you’ve used in your HMRC online account.

Claiming for past years

You can claim Employment Allowance for a previous tax year, dating back to the 2015 to 2016 tax year. Employment allowance was £2,000 before April 2016.

Read ‘Claiming Employment Allowance: further employer guidance’ for more information.

*Information on this page was correct as of 1st September 2019.

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