Employment Allowance Calculator

Up to £10,500 off your employer NI bill · if you qualify. Check eligibility, see how far it stretches, and the director salary strategy it unlocks.

Employment Allowance Saving
£0
Enter your payroll to calculate
Eligible?
·
Employer NI Before
£0
Employer NI After
£0
Allowance Used
£0
Runs Out In
·
Backdating Available
Up to 4 tax years
Enter your payroll to get started.
Employer NI · Before and After the Allowance

Explore More Tools

👥 Employer Cost ⚖️ Dividend vs Salary 🏦 Director's Loan 🏢 Corporation Tax 🧾 Flat Rate VAT 💷 Salary Calculator 🪪 NI Contributions 👶 Nanny Payroll ⏰ Late Payment Interest 🏗️ PAYE vs Ltd

Employment Allowance FAQs

What is the Employment Allowance?
An annual reduction of up to £10,500 in employer NI for eligible employers, claimed via a flag in your payroll software (EPS). It offsets employer NI as it accrues until exhausted · effectively a rebate on your first ~£75,000 of above-threshold payroll.
Who cannot claim?
Companies where one director is the only person earning above the £5,000 secondary threshold · the classic one-person Ltd · plus most public bodies and employers of purely domestic staff. The old £100,000 eligibility cap has been removed, so nearly every business with two or more genuine earners qualifies.
How does it change director salary strategy?
Sole directors (ineligible) often take ~£5,000-£6,000 to avoid employer NI. Add a second earner (a genuinely working spouse above £5,000 qualifies the company) and £12,570 becomes optimal: full personal allowance, State Pension year, corporation-tax deductible, employer NI wiped by the allowance. The switch is worth over £1,000/year in many one-person companies · with real work by the second person being the operative requirement.
How many employees does £10,500 cover?
Employer NI on about £75,000 of above-threshold pay · roughly two £35,000-£40,000 staff or several part-timers. After that, 15% resumes on the excess. Small teams effectively hire their first one or two people NI-free.
How do I claim?
Tick the Employment Allowance box in your payroll software; it files with the next EPS. Mid-year claims apply to the whole year, and you can backdate up to 4 previous tax years · if you have never claimed, that check alone can recover thousands.

For informational purposes only · Not tax advice · Employment Allowance £10,500 (2025/26 onward), employer NI 15% above £5,000 · Sole-director companies excluded · Claim via EPS; backdating up to 4 years