Employment Allowance Calculator

The Employment Allowance (EA) is a UK government scheme allowing eligible employers to reduce their annual Employer's Class 1 National Insurance (NICs) liability. For the 2025-2026 tax year, the maximum allowance is <strong>£10,500</strong>. (This was £5,000 in 2024/25).

Most businesses and charities that pay Employer's Class 1 NICs are eligible. The previous rule excluding businesses with an employer NICs bill of £100,000 or more in the prior tax year has reportedly been removed for the 2025/26 tax year, widening eligibility.

You generally <strong>cannot</strong> claim if: 1) You are a public body or do more than 50% of your work in the public sector. 2) You are a company with only <strong>one</strong> employee paid above the Class 1 NICs secondary threshold, AND that single employee is also a director of the company (the 'sole director' rule).

It checks your answers against the main eligibility rules (public body, sole director). If eligible, it calculates your allowance as the <strong>smaller</strong> of your total annual employer NICs liability or the £10,500 maximum. For example, if your liability is £8,000, your allowance is £8,000. If your liability is £15,000, your allowance is £10,500.

<strong>No.</strong> This is an estimate based on the main eligibility rules. Complex structures (like connected companies or IR35) can affect eligibility. Always use this calculator for guidance and refer to official HMRC information or a payroll professional before making a claim via your Employer Payment Summary (EPS).