Employment Allowance lets eligible UK employers reduce their annual Class 1 secondary National Insurance bill. For the 2025/26 tax year, qualifying businesses can claim up to £10,500 off their employer NIC liability. Use this calculator to check your eligibility and estimate how much you could save on your PAYE bill. Whether you already know your employer NIC total or need to calculate it from your payroll, our tool gives you instant results without any page reloads.
How It Works
- Answer the eligibility questions to confirm you can claim Employment Allowance
- Enter your known employer NIC liability or add your employees for an automatic calculation
- View your estimated savings instantly, with the option to compare tax years
Check Your Eligibility
Add your employees below and we'll calculate the estimated employer NIC automatically. ?
| Name (optional) | Pay Frequency | Gross Pay | Category | Include | Actions |
|---|
Your Results
2025/26
2024/25
Difference
| Employee | Annual Pay | Category | Employer NIC |
|---|---|---|---|
| Total Employer NIC | £0.00 | ||
Frequently Asked Questions
Employment Allowance is a UK government relief that allows eligible employers to reduce their annual Class 1 secondary National Insurance contributions. For the 2025/26 tax year, qualifying employers can claim up to £10,500 off their employer NIC bill. You claim it through your payroll software or HMRC Basic PAYE Tools by submitting an Employer Payment Summary (EPS).
For the 2025/26 tax year (6 April 2025 to 5 April 2026), the Employment Allowance is £10,500. This is a significant increase from the £5,000 allowance available in 2024/25, meaning eligible employers can reduce their employer National Insurance bill by up to £10,500.
The employer (secondary) National Insurance rate for 2025/26 is 15% on earnings above the secondary threshold of £5,000 per year. This is an increase from the 2024/25 rate of 13.8% and the secondary threshold has reduced from £9,100 to £5,000, meaning employers pay more NIC overall—making Employment Allowance even more valuable.
Most UK employers are eligible, including businesses, charities, and community amateur sports clubs (CASCs). However, you cannot claim if: you do more than 50% of your work in the public sector, you're a single-director company where the director is the only employee liable for Class 1 NIC, or you only employ domestic staff (excluding care workers). Only one company in a connected group can claim.
A single-director company cannot claim Employment Allowance if the director is the only person liable for secondary Class 1 National Insurance. However, if the company has additional employees (not just the director) who earn above the secondary threshold, then the company may be eligible to claim.
You claim Employment Allowance through your payroll software or HMRC Basic PAYE Tools. Submit an Employer Payment Summary (EPS) at the start of the tax year indicating you wish to claim. The allowance is then automatically applied against your employer NIC liability throughout the year until it's used up or the tax year ends.
The secondary threshold is the earnings level above which employers must pay National Insurance on employee wages. For 2025/26, it's £5,000 per year (£417/month, £96/week). For 2024/25, it was £9,100 per year. Employers pay 15% (2025/26) or 13.8% (2024/25) on all earnings above this threshold.
Yes, certain employee categories benefit from reduced or zero employer NIC up to higher thresholds. Employees under 21, apprentices under 25, and qualifying veterans pay 0% employer NIC up to £50,270 (the upper secondary threshold). Employers in Freeport or Investment Zones may have different thresholds of £25,000. Our calculator supports these categories for more accurate estimates.
If you engage workers through intermediaries who are deemed inside IR35, you become responsible for deducting their employer NIC. However, you cannot include this deemed employer NIC when calculating your Employment Allowance claim. You should exclude these workers when estimating your allowance eligibility and benefit.
No. If your business is part of a group of connected companies or charities, only ONE entity in the group can claim Employment Allowance. You must decide which company will claim and cannot split the allowance between multiple entities. HMRC may ask for proof if they suspect multiple claims within a connected group.
If you operate more than one PAYE payroll scheme, you can only claim Employment Allowance against one of them. Choose the scheme with the highest employer NIC liability to maximise your benefit. You cannot split the allowance across multiple schemes.
If your total employer Class 1 NIC for the year is less than the Employment Allowance cap (£10,500 for 2025/26), you'll only receive relief equal to your actual NIC liability. The unused portion cannot be carried forward to the next tax year or claimed as a refund—you simply pay no employer NIC for that year.
This calculator provides estimates for budgeting and planning purposes using simplified calculations based on published HMRC rates and thresholds. Actual employer NIC can vary based on pay periods, earnings patterns, and specific employee circumstances. For precise figures, use HMRC-approved payroll software or consult a qualified accountant.
Official guidance is available on GOV.UK. Key pages include the Employment Allowance overview, eligibility criteria, and the annual rates and thresholds for employers. We link to these official sources at the bottom of this page for your reference.