The Employers' National Insurance Contribution (NICs) allowance or Employment Allowance is given to qualifying employers to offset their annual Employers' National Insurance liabilities. It is not a repayable credit.
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At a glance
The Employers' National Insurance Contributions (NICs) allowance is an allowance given to employers to offset against their annual Employers' National Insurance liabilities.
It is not a repayable credit.
Qualifying UK employers may claim an Employment Allowance to offset against the employer’s NICs (ER’s NICs) and so reduce the payroll cost of being an employer.
Amount of allowance
| Years | 2025-26 | 2024-25 2023-24 2022-23 |
2020-22 | 2016-20 |
|
Allowance |
£10,500 |
£5,000 |
£4,000 |
£3,000 |
| Extra restrictions (see below) | a) | a) | b) |
The allowance:
- Is available to qualifying employers.
- Is claimed via your payroll software.
- Can all be claimed in week one/month one if sufficient Class 1 NICs are paid by the employer.
Restrictions
The allowance may not be claimed by an employer if:
- a) From 6 April 2020: its secondary NICs liability exceeded £100,000 in the tax year immediately prior to the year of the claim. Note that this restriction will be removed from 6 April 2025
- b) From April 2016: the company's only employee is the sole director or is a company whose director is the only employee being paid above the class 1 NICs secondary threshold.
- It is already being claimed by a connected company or Limited Liability Partnership (LLP): the connection test is based on the Associated Company rules.
- No salary is paid, only a deemed payment is calculated under IR35.
- It is a connected charity or community amateur sports club, the connection test is based on the Gift Aid Small Donations tests.
- Its employees consist of purely domestic staff, such as a nanny, chauffeur or gardener.
- It carries on functions either wholly or mainly of a public nature.
There are also restrictions following the merger of two businesses that have claimed the allowance up until that point in the tax year.
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