Employment Allowance (Employer NI Zero-Rate) Calculator 2026
Calculate employer NI savings under the Employment Allowance. Up to £10,500/year off your employer NI bill. Available to businesses with NI bill under £100,000.
Employment Allowance Calculator
Frequently Asked Questions
What is the Employment Allowance?
The Employment Allowance lets eligible employers reduce their employer National Insurance (Class 1 secondary NI) bill by up to £10,500 per year (2025/26).
Who qualifies for the Employment Allowance?
Most employers with an employer NI bill of less than £100,000 in the prior tax year qualify. This includes limited companies, partnerships, and charities — but not sole directors with no other employees.
How much is the Employment Allowance in 2025/26?
£10,500 per year from 6 April 2025 (increased from £5,000 in 2024/25 as part of the Autumn Budget 2024 package alongside the NI rate increase to 15%).
How do I claim the Employment Allowance?
Claim via your payroll software or HMRC PAYE Online by setting 'Employment Allowance indicator' to 'yes'. You can backdate a claim within the current and two previous tax years.
Can a sole director claim the Employment Allowance?
No — if the only employee is also the sole director, the business cannot claim. If there is at least one other employee (even part-time), the company may be eligible.
Does the £100,000 threshold apply to current or prior year NI?
The eligibility is based on your employer NI liability in the PREVIOUS tax year. If it was under £100,000, you can claim in the current year.
Can a charity claim the Employment Allowance?
Yes — charities are eligible for the Employment Allowance regardless of their NI bill size (the £100,000 threshold does not apply to de minimis state aid charities).
Does the Employment Allowance reduce PAYE payments?
Yes — the allowance is offset against your employer NI monthly payments. If your monthly NI is £5,000, the first two months' payments are £0 until the £10,500 allowance is used.
What is the employer NI rate in 2025/26?
15% on employee earnings above the £5,000 secondary threshold (per year), from April 2025. The threshold was reduced from £9,100 and the rate increased from 13.8%.
Can I claim the Employment Allowance if I'm a personal service company (PSC)?
PSCs (IR35) where the director provides services through the company can claim if they have other employees. A sole-director PSC with no other staff cannot claim.
What if my employer NI is less than £10,500?
The allowance reduces your NI to zero. You cannot claim a cash refund for unused allowance, but you can offset it against any PAYE/NI/CIS overpayment.
Does the Employment Allowance affect my pension contributions?
No — it only applies to employer NI contributions, not pension contributions or income tax.