Summary
Description
The amount you can claim for employment allowance is £5,000.00 per tax year. If eligible, you use this to reduce your company's national insurance contributions.
The previous Employment allowance was £4,000, which changed in April 2022.
- Your company's Class 1 national insurance (NI) bill was £100,000 or more in the previous tax year
Employment allowance counts as a type of State Aid. This is because it can place some businesses in a better position over others. This could then affect competition and trade.
Resolution
What does this mean?
Over 99% of micro-businesses and 93% of small businesses can still claim the allowance.
Regardless of the size of your company, you can’t claim the employment allowance if:
- You’re the director and the only employee that’s paid above the secondary threshold
- You employ someone for personal, household or domestic work. Unless they’re a care or support worker
- You’re a public body or business doing more than half of your work in the public sector, unless you’re a charity
- You’re a service company working. You're under IR35 rules, and your only income is the earnings of the intermediary
Get more information about employment allowance. Read the HMRC article Changes to Employment Allowance (opens in a new window)
What do I need to do? >
Submit your application for Employment Allowance as soon as you start the new tax year.
To apply for Employment Allowance for the new tax year:
-
From the Summary tab, select Record Claim.
-
Enter the details of your employment allowance claim:
NOTE: You must choose an industry sector before submitting your claim. If you are not sure what sector applies to your business, contact HMRC. 
Industry Sector Agriculture
Fisheries and Aquaculture
Road Transport
Industrial
State Aid Rules Do Not Apply
Select the industry sector that applies to your business.
If none of the named sectors applies to you, either select:
Industrial - if the state aid rules apply to your business
or
State Aid Rules Do Not Apply - if your business does not fall under state aid rules.
State Aid Claimed € 0.00 You do not need to enter this value. HMRC will check this for you.
The value appears in Euros because the thresholds are set by the European Commission.
- Select Next.
- Confirm the details you're submitting to HMRC then select Submit.
You can view the status of your claim from the Summary tab.
HMRC notify you within 5 working days if you do not qualify for Employment Allowance.
Your Employment Allowance Claim section may display the message:
"You have indicated that you are not eligible for Employment Allowance."
This messageis now permanent in the payroll. It doesn't stop you from claiming Employment Allowance.
Follow the steps in the section "When you next submit an EPS".
If you have claimed Employment Allowance in a previous payroll program >
Related Solutions
Also read our article I forgot to enter my Employment Allowance to date.
Africa
Asia
Australia
Canada
France
Ireland
Kenya
Nigeria
Portugal
South Africa
Spain
United Arab Emirates
United States
Germany