Employment Allowance

Companies or charities can get up to £3000 a year off their National insurance bill by claiming employment allowance. The allowance reduces the employer’s class 1 National Insurance each time the payroll is run until the £3000 has been used up or the tax year ends (whichever is sooner).


Who can claim Employment allowance?

Employment allowance can be claimed by a business or Charity providing they are paying class 1 National Insurance. If the employer has more than one PAYE reference number, the employment allowance can only be claimed on one of the PAYE references.


What stops an employer from claiming employment allowance?

Business’s cannot claim employment allowance if any of the below applies


  • Director only payroll, where the director is the only employee paid above the secondary threshold

  • A business or public body that does more than half of their work in a public sector such as local councils and the NHS

  • The business only employ’s someone for Personal, Household or domestic work