Employment Allowance is a government initiative that enables employers to lower their National Insurance bill.
Before you begin
You can only claim against your Class 1 National Insurance liability up to a maximum of £10,500 each tax year.
How to claim Employment Allowance
- From the left side bar, navigate to Settings.
- Under the Company heading, select Allowances.
- Click Enable to the right of Employment Allowance.
- Enter the amount (if any) of Allowance already claimed.
- Click Enable. The Employment Allowance will be automatically reported on the EPS.
- If you need to stop claiming at any time, click Stop claim to the right of Employment Allowance.
FAQs
If my company is part of a group, can each company claim Employment Allowance?
No. A group of charities or companies, or connected companies, can only claim Employment Allowance for one company. For more information, see HMRC's Guidance on Connected companies and Employment Allowance.
Who is ineligible for Employment Allowance?
The following entities are ineligible for Employment Allowance:
- Public sector bodies, or businesses carrying out more than 50% of their work in the public sector, unless they are a charity
- Those employing domestic workers, such as cleaners or gardeners, unless they are care or support workers
- Single director limited companies with no other employees paid above the secondary threshold (unless there is at least one other employee or director who earns above the secondary threshold)
- Companies where a director meets the criteria at the start of the tax year, but where a change in the company results in the director becoming the only employee. In this case, any employment allowance claimed during this tas year is allowed, but will cease from the start of the following tax year.
For more detailed eligibility information, see HMRC's Employment Allowance.
Does Employment Allowance count toward de minimis state aid?
No, it does not.