Help & Advice

  • Advice for employers
  • Last updated 15 March 2024

Employment allowance

As an Employer, it is important to be aware of the HMRC Employment Allowance, which can help to reduce your National Insurance contributions.

The Employment Allowance was introduced in 2014 and allows eligible employers to claim a reduction of up to £5,000 on their employer’s National Insurance contributions (NICs) bill. This means that if you are eligible, you could save up to £5,000 per year on the cost of employing someone.

To be eligible for the Employment Allowance, you must be an employer who pays Class 1 National Insurance contributions on your employees' earnings. This includes employers whose employees who are paid above the National Insurance Lower Earnings Limit (LEL) of £120 per week, or £520 per month (in the 2024/2025 Tax Year).

It’s important to note that not all employers are eligible for the Employment Allowance. If you are a sole director who is the only employee of your company, or if you employ someone for domestic work, such as a cleaner or gardener, you will not be eligible for the allowance.

If you are employing a Care and Support Worker to care for a disabled child, then you may be eligible. You will need to read the eligibility criteria on HMRC’s website and determine whether or not you are eligible.

To claim the Employment Allowance, you just need to let us know that you are eligible for this and we will make the claim with HMRC. You can claim the allowance at any point during the tax year, but you can only claim it once. If you are eligible, the allowance will be automatically deducted from your National Insurance bill each month by us.

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