If you're eligible to claim Employment Allowance, notify HMRC that you're claiming it and track how much you've claimed.

The steps below explain how to apply for the 2026/2027 tax year. Follow our separate article if you need to claim for a previous year.

Submit an Employer Payment Summary (EPS) application

HMRC no longer requires state aid information when you submit your application. Due to this, we've removed these options from Sage 50 Payroll v32.

Follow the steps below to complete your application.

1. Go to Payroll, then Change Process Date.
2. Ensure your process date is within the 2026/2027 tax year, then select OK.
3. Go to Company, then Settings.
4. Beside the Eligible for Employment Allowance checkbox, select the Submit button.
   • Where the Eligible for Employment Allowance checkbox is already available, you've already applied:
     • If you need to submit another application, select Submit, then continue to Step 5
     • If you're ready to start claiming it in your software, skip to the enable Employment Allowance section
5. Select Continue then Submit.
6. Select Submit again, then allow the submission to complete.
7. Print the submission log if required, then select Close.

You've completed your application submission. If you don't hear from HMRC, your application was successful.

HMRC will send you a notification in your IR Secure Mailbox within five working days if your application was unsuccessful.

Enable Employment Allowance

Once you've completed your application, the option to enable Employment Allowance is available in your software.

If you're not confident HMRC will accept your application, wait five working days and check for a notification from HMRC. 

Where you've checked your eligibility and are confident of approval, you can enable it right away.

1. Go to Company, then Settings.
2. Select the checkbox beside Eligible for Employment Allowance.
   
   TIP:

   This checkbox is only available once you've submitted your EPS application.

3. Select OK to save this change.

Your software now automatically calculates your Employment Allowance values for each tax month when you run the P32.

Now that you've enabled it, you can track your Employment Allowance values in your software.

Further information

Find useful information and the answers to a range of common questions in our Employment Allowance FAQ article.