Skip to content
logo Knowledgebase

Employment Allowance

Created on  | Last modified on 

Summary

Information on Employment Allowance in Sage 50 Payroll, including an overview, eligibility, and submitting your application.

Description

Employment Allowance is an employer benefit that reduces your employer's NI liability. The allowance remains at £10,500 per year for the 2026/2027 tax year.

With Employment Allowance, each time you run your payroll you pay less employer's Class 1 NI.

This continues until you've used the full allowance for the tax year or until the tax year ends, whichever is sooner.

CAUTION:

If you claim Employment Allowance, you must apply again at the start of each tax year. It doesn't carry over between tax years automatically.

Claim the allowance in your software

Check you're eligible

If you're not sure whether your business is eligible, go to Gov.UK to check HMRC's guidance.

Submit your application

When you're ready to apply, follow our apply for and enable Employment Allowance article.

Further information

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

Make timesheets easy

The Sage HR timesheets module helps you pay your employees accurately, by making it easy to track their time at work. Click below to leave your details and find out more.

Leave your details

Image