Employment Allowance Calculator
Check whether your business can claim Employment Allowance and estimate how much employer National Insurance it could save. The allowance is generous, but the eligibility rules matter, especially for single-director companies, connected companies, public-sector work and household employees.
Check your Employment Allowance saving
Enter your annual employer Class 1 NI bill before Employment Allowance, then answer the main GOV.UK eligibility checks.
Annual secondary Class 1 NI liability before the allowance.
For example off-payroll workers or non-care domestic employees.
Maximum saving
GBP 10,500
The allowance reduces eligible employer Class 1 NI until it runs out or the tax year ends.
Employer NI rate
15%
Standard secondary Class 1 NI applies above the employer secondary threshold.
Secondary threshold
GBP 5,000
The annual secondary threshold is GBP 5,000 in both 2025/26 and 2026/27.
Start with eligibility, not the saving
Employment Allowance looks simple at first glance: claim up to GBP 10,500 off your employer National Insurance bill. In practice, the saving only matters if the employer can claim and the NI liability is the right type of liability. It is not a refund of employee NI, not a grant, and not a separate allowance for each employee.
This calculator therefore works in two stages. First it checks the common blockers from GOV.UK eligibility guidance: single-director-only companies, connected companies, more-than-half public-sector work, domestic household employees and off-payroll worker liabilities. Then it applies the allowance to the remaining eligible employer Class 1 NI.
The result is useful for small companies planning payroll, charities checking whether the allowance removes most of their employer NI, or directors comparing a salary/dividend plan with and without Employment Allowance.
| Question | Why it matters |
|---|---|
| Is the employer eligible? | Some employers cannot claim even if they pay employer NI. |
| Is the NI eligible? | Off-payroll and certain domestic worker liabilities are excluded. |
| How much NI is left? | The allowance is capped at the lower of eligible NI and GBP 10,500. |
| Is there a group? | Connected companies or charities need to choose one claimant. |
How this Employment Allowance calculator works
Inputs used
- Tax year: 2025/26 or 2026/27.
- Annual employer secondary Class 1 NI liability before Employment Allowance.
- Employer type and eligibility flags for public-sector work, single-director companies, connected companies and payroll selection.
- Employer NI from employees that cannot be included in the claim, such as off-payroll workers or non-care household domestic workers.
Calculation method
- Use GBP 10,500 as the Employment Allowance for both supported tax years.
- Remove excluded employer NI from the liability to estimate the eligible employer Class 1 NI base.
- Apply GOV.UK eligibility blockers before calculating a saving.
- If eligible, calculate allowance used as the lower of GBP 10,500 and eligible employer Class 1 NI.
- Show remaining employer NI after the allowance and any unused allowance left in the tax year.
Assumptions
- The calculator assumes your entered employer NI figure is annual secondary Class 1 NI before Employment Allowance.
- It does not calculate employer NI from every employee salary. Use the True Cost of an Employee Calculator for a per-employee cost estimate.
- The old GBP 100,000 employer NI cap does not block 2025/26 or 2026/27 claims, based on GOV.UK guidance from April 2025.
- Connected-company, charity group and public-sector tests can be fact-specific, so treat the result as a practical check rather than a formal claim decision.
What this does not cover
- It does not submit an Employment Allowance claim through payroll software or HMRC Basic PAYE Tools.
- It does not decide connected-company status. Check HMRC detailed Employment Allowance guidance if your ownership or group structure is complicated.
- It does not reduce employee National Insurance, Income Tax, student loans, pension contributions or Apprenticeship Levy. Use the Take-Home Pay Calculator for employee deductions.
- It does not model full payroll, benefits in kind or all employer costs. Use the True Cost of an Employee Calculator for broader hiring costs.
Worked examples
A small shop expects GBP 8,500 of employer Class 1 NI in 2026/27 and has no eligibility blockers. Employment Allowance can cover the full GBP 8,500, leaving no employer NI to pay from that eligible liability and GBP 2,000 of allowance unused.
A growing agency expects GBP 18,000 of eligible employer NI. The allowance can reduce the bill by GBP 10,500, leaving GBP 7,500 to pay. That is why the allowance is valuable even when it does not wipe out the whole PAYE employer NI bill.
A one-person limited company where the sole director is the only employee liable for employer NI gets a very different answer. GOV.UK says that single-director restriction blocks the claim, so the saving is GBP 0 unless the company has another qualifying employee liability.
Before claiming through payroll
You normally claim Employment Allowance through payroll software by sending an Employment Payment Summary. If you have more than one payroll, GOV.UK says you can only claim against one of them.
If you are part of a connected group, decide which company or charity will claim before payroll is run. Do not treat the GBP 10,500 as available to every company in the group.
Keep evidence for the eligibility checks. The allowance is simple when you are a normal trading employer with ordinary staff, but it becomes less simple when work is mainly public-sector, household employment is involved, or the only liability relates to off-payroll working rules.
Common Employment Allowance mistakes
Claiming it against employee NI
Employment Allowance reduces employer secondary Class 1 NI. It does not change what employees pay from wages.
Ignoring the single-director rule
A company with one director cannot claim if that director is the only employee liable for secondary Class 1 NI.
Double-claiming in a group
Connected companies and charities need one claimant. The allowance is not multiplied across each company.
Including excluded workers
Employer NI for off-payroll workers and non-care domestic household work cannot usually be included in the claim.
Employment Allowance FAQs
How much is Employment Allowance in 2025/26 and 2026/27?
Can a single-director company claim Employment Allowance?
Can connected companies all claim Employment Allowance?
Does Employment Allowance apply to employee National Insurance?
Can employers with more than GBP 100,000 employer NI claim?
Official sources
Last verified: May 9 2026. Calculations are estimates based on the published rules and assumptions shown on this page.
- GOV.UK Employment Allowance - official allowance amount, what the allowance reduces and how it is used through payroll
- GOV.UK Employment Allowance eligibility - single-director restriction, public-sector rule, excluded employees, connected companies and payroll rules
- GOV.UK employer rates and thresholds 2026 to 2027 - 2026/27 employer Class 1 NI rate, secondary threshold and Employment Allowance amount
- GOV.UK employer rates and thresholds 2025 to 2026 - 2025/26 employer Class 1 NI rate, secondary threshold and Employment Allowance amount
- GOV.UK Employment Allowance detailed guidance - HMRC detailed guidance for groups, connected companies and claim situations