How does this calculator estimate the allowance?

It checks your answers against the main eligibility rules (public body, sole director). If eligible, it calculates your allowance as the smaller 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.

Employment Allowance (EA) Calculator (UK 2025/26)

Estimate your potential saving on Employer's Class 1 National Insurance (NICs) for the 2025/26 tax year (starts 6 April 2025).

Total Estimated Annual Employer's Class 1 NICs Liability (£)

Eligibility Check:

Are you a public body or do more than 50% of your work in the public sector?

Yes No

Are you a company with only one employee paid above the Class 1 NICs threshold, AND that employee is also a director?

Yes No

Employment Allowance (EA) Overview (UK)

Purpose:

To help UK businesses estimate their potential savings from the Employment Allowance scheme, which reduces their Employer's Class 1 National Insurance (NICs) bill.

Inputs:

Estimated Annual Employer Class 1 NICs Liability (£)
Eligibility Question 1 (Public Body)
Eligibility Question 2 (Sole Director)

Output:

Estimated EA saving (up to £10,500 for 2025/26) and your resulting net NICs liability.

Calculation (2025/26 Tax Year):

1. Check Eligibility: If "Public Body" = Yes OR "Sole Director" = Yes, then Ineligible (Allowance = £0).

2. If Eligible:
Max Allowance: £10,500
Your Allowance = MIN(Annual NICs Liability, £10,500)

3. Net NICs Payable = Annual NICs Liability - Your Allowance

Note: The previous £100,000 NICs liability cap for eligibility (from the prior year) is reportedly removed for the 2025/26 tax year. This calculator reflects that change.

Check GOV.UK for official rules.

Key Changes to Employment Allowance (EA) for 2025/26 🇬🇧

The UK government announced significant changes to the Employment Allowance, making it more valuable for many businesses.

Allowance Increase

The maximum allowance per business has increased to £10,500 for the 2025/26 tax year.
This is up from £5,000 in the 2024/25 tax year.
This means your business can save up to an extra £5,500 on employer NICs compared to the previous year, provided your liability is high enough.

Eligibility Cap Removed

Previously, businesses with an employer Class 1 NICs liability of £100,000 or more in the *previous* tax year were ineligible.
This £100,000 cap is reportedly removed for the 2025/26 tax year.
This makes many medium-sized businesses newly eligible for the £10,500 allowance.
The main exclusions for public bodies and sole-director companies remain.

Remember to claim the EA through your payroll software (via an Employer Payment Summary - EPS) at the start of each tax year.

Frequently Asked Questions

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 £10,500. (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 cannot 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 one 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 smaller 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.

No. 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).

Employment Allowance (EA) Calculator (UK 2025/26)

Estimated Employment Allowance (2025/26):

Employment Allowance (EA) Overview (UK)

Purpose:

Inputs:

Output:

Calculation (2025/26 Tax Year):

Key Changes to Employment Allowance (EA) for 2025/26 🇬🇧

Allowance Increase

Eligibility Cap Removed

Frequently Asked Questions

What is the Employment Allowance (EA) in the UK?

Who is eligible for the Employment Allowance in 2025/26?

Who cannot claim the Employment Allowance?

How does this calculator estimate the allowance?

Is this calculation exact?

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