UK Employment Allowance Eligibility & Savings Checker
Answer a few questions to check the main Employment Allowance rules, then estimate how much qualifying employer Class 1 National Insurance it could cover in 2026/27 or 2025/26.
LedgerKit provides estimates based on the information entered and the configured rates. Results do not constitute accounting, tax or legal advice. Check the latest official guidance or consult a qualified professional before acting on a calculation.
How this checker works
Choose the tax year and legal form, then confirm any charity or Community Amateur Sports Club status. The checker covers the main exclusions for public authorities, work that is at least 50% public in nature, ordinary household staff and companies where one director is the only employee whose pay creates employer Class 1 National Insurance.
An incorporated charity must still pass the limited-company sole-director test. Charity or CASC status can remove the public-function exclusion, but it does not remove other Employment Allowance conditions. An individual employing a care or support worker may qualify only where HMRC’s specific duties, care-need and funding conditions are met.
Companies, Limited Liability Partnerships and charities connected at the start of the tax year can make only one claim for the group. Select this employer only if the group has chosen it as the sole claimant. Complex control, takeover, demerger and mixed-activity cases need an HMRC or professional review.
An unconnected employer with one PAYE scheme should enter that scheme’s qualifying employer secondary Class 1 National Insurance. If it has several schemes, its annual entitlement can reflect qualifying employer Class 1 National Insurance across all of its own schemes. The claim is made on one nominated scheme; if that scheme does not use the full allowance, HMRC says the employer can apply after year-end for an unused balance supported by the other schemes, provided its PAYE is up to date.
A connected group is different. Its one selected employer must claim against one nominated PAYE scheme only, and unused allowance cannot be transferred to another scheme run by that employer or another connected organisation. In every case, exclude employee National Insurance, Class 1A or 1B, off-payroll deemed payments, ordinary household staff and other liabilities HMRC says cannot be covered.
For both tax years shown, the maximum is £10,500. The estimate uses the lower of the qualifying employer Class 1 National Insurance allowed for the selected PAYE arrangement and £10,500, then subtracts allowance already used. The former £100,000 prior-year employer-NI limit and state-aid restriction no longer apply from 6 April 2025.
Employment Allowance is not a cash grant. A fresh claim is needed each tax year through payroll software or HMRC Basic PAYE Tools, and the allowance reduces qualifying employer National Insurance as it arises.
Worked example
A non-charitable limited company has another employee whose pay creates employer Class 1 National Insurance, performs less than 50% public-function work, is not connected to another company or charity, and expects £12,000 of qualifying employer Class 1 National Insurance on its only PAYE scheme in 2026/27. The estimated annual allowance is capped at £10,500, leaving £1,500 of qualifying employer National Insurance. With none used yet, the estimated remaining saving is £10,500.
Frequently asked questions
How much is Employment Allowance?
The maximum is £10,500 for 2026/27 and 2025/26. If qualifying employer Class 1 National Insurance is lower, the saving is limited to that lower amount. The claim normally reduces liabilities as they arise; HMRC can refund an eligible unused balance in some circumstances, including the multi-scheme case described below.
Can a one-director company claim?
Not where one director is the only employee whose pay creates employer Class 1 National Insurance for the whole tax year. This rule also applies to a limited company that is a charity or CASC. If another employee or director creates a liability at any point, including a qualifying seasonal worker, the company can potentially qualify for the year.
Does the old £100,000 employer-NI limit still apply?
No. The prior-year £100,000 employer-NI restriction and the associated state-aid restriction were removed from 6 April 2025. They are not applied to the 2025/26 or 2026/27 checks.
What counts as qualifying employer National Insurance?
Use employer secondary Class 1 National Insurance that the allowance can legally cover. Exclude employee National Insurance, Class 1A and 1B, off-payroll deemed payments, ordinary private household staff and liabilities for workers transferred with a business during that tax year. Ask the payroll provider if the figure is mixed.
What if the employer has more than one PAYE scheme?
An unconnected employer nominates one scheme, usually the one expected to use most or all of the allowance. If it does not use the full amount during the year, HMRC says the employer can apply after year-end for an unused balance based on qualifying employer Class 1 National Insurance across its own schemes, provided PAYE is up to date. A connected group is stricter: one selected employer and one nominated scheme only, with no transfer of unused allowance to another scheme run by that employer or another connected organisation.
How is Employment Allowance claimed?
Make a fresh claim each tax year through payroll software by sending an Employer Payment Summary with the Employment Allowance indicator, or use HMRC Basic PAYE Tools. Keep records supporting the claim and follow HMRC’s correction process if eligibility changes.
Is this an HMRC eligibility decision?
No. It is a guidance check for common cases. Borderline public functions, connected control, care-worker conditions, takeovers, demergers, transfers and special payroll circumstances should be confirmed with HMRC or a qualified adviser.