Reviewed by Mustafa Bilgic
Founder, WebCalculator · Last updated 26 July 2026
Employment Allowance and NI rates from GOV.UK. Estimates only — not financial advice.
Eligible employers can reduce their Class 1 National Insurance bill by up to £10,500 per year using the Employment Allowance. Enter your total annual payroll below to see how much employer NI you owe and whether the allowance covers it in full. For many small businesses with 2-3 employees, it wipes out the employer NI bill entirely.
Enter your total annual payroll
The Employment Allowance is a £10,500 annual credit against your employer Class 1 NI liability. It reduces the NI you owe to HMRC, not the NI deducted from employees' pay. It is claimed through your payroll software and applied automatically each pay period until the £10,500 is used up.
You can claim if:
For calculating the total cost of employing someone including NI, see the employer cost calculator. For the NI impact on individual employees, try the NI calculator.
The Employment Allowance is £10,500. It was increased from £5,000 to £10,500 from April 2025. Source: GOV.UK.
Most employers with a Class 1 NI liability below £100,000 in the previous tax year can claim. You cannot claim if you are a public body, employ someone for personal household work only, or are a single-director company with no other employees.
Claim through your payroll software by ticking the Employment Allowance indicator at the start of the tax year. Your software automatically reduces the employer NI due each month until the £10,500 is used up.
A company with a single director and no other employees cannot claim. If the company employs at least one other person and the NI liability was below £100,000, it can claim.
Often yes. An employee on £30,000 generates about £3,750 of employer NI. The £10,500 allowance could cover the full NI bill for 2-3 employees on typical salaries.
The employer NI rate is 15% on employee earnings above the secondary threshold of £5,000 per year. Source: GOV.UK.