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.

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

  • businesses
  • charities
  • community amateur sports clubs

  There are a small number of businesses and organisations that can’t claim Employment Allowance e.g. if you employ someone for personal, household or domestic work such as a nanny or gardener, or if you carry out functions of public nature such as NHS services, GP, debt collection for a government department.

You can claim the Employment Allowance through your payroll software.

You can find more information about the Employment Allowance here.

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