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What is employment allowance?

Created on  | Last modified on 

Summary

This guide explains employment allowance in Sage 50 Payroll and how it can benefit your business.

Description

What is employment allowance?

It's a great employer benefit that helps you reduce your National Insurance liability by up to £5,000.

Each time you run your payroll you pay less employers’ Class 1 National Insurance until the £5,000 has gone or the tax year ends, whichever is sooner.

Am I eligible?

It's easy to check if you're eligible by referring to HMRC's guidance.

Check HMRC guidance now

NOTE: HMRC no longer send a confirmation letter for your employment allowance. If your claim is rejected, you'll receive an automated message from HMRC within five working days.  

Set up and claim in your software

Great news, it's really easy to claim this allowance in your software. Use our handy How to claim employment allowance to do this.

Is this the same as small employers' relief?

No, this benefit is different to small employers' relief, you may be eligible to claim this too. Use our helpful What is Small Employers' Relief (SER)? guide to find out more and check if you're eligible.