Employment Allowance
Summary
Description
What is Employment Allowance?
It's an employer benefit that reduces your employer's National Insurance liability. With Employment Allowance, each time you run your payroll you pay less employers’ Class 1 National Insurance.
This continues until you've used the full allowance for the tax year or until the tax year ends, whichever is sooner.
2026/2027 tax year
The allowance remains at £10,500 per year for the 2026/2027 tax year.
To find out more about legislation for the 2026/2027 tax year, visit the payroll legislation for the 2026/2027 tax year article.
State aid
Employment allowance no longer counts as 'de minimis state aid'. This means HMRC don't require the information from the state aid options within the Employer Allowance application submission.
As they're obsolete, we've removed these options as of v32.
Check you're eligible
If you're not sure whether your business is eligible, go to Gov.UK to check HMRC's guidance.
HMRC don't send confirmation letters for Employment Allowance. If they reject your claim, HMRC send an automated message within five working days.
Claim the allowance in your software
Is this the same as Small Employers' Relief (SER)?
No, this benefit is different to SER, you could be eligible to claim this too.
Visit our what is SER article if you'd like to find out more.
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.
Solution Properties
- Solution ID
- 200427112309394
- Last Modified Date
- Mon Feb 23 08:06:10 UTC 2026
- Attributes
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Product DetailsModules: Report Writer
Modules: Tax
Modules: VAT
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