Businesses and charities in the UK that pay Employer Class 1 National Insurance Contributions (NIC) on employees/directors’ earnings are entitled to up to  £3,000 Employment Allowance to reduce their annual employer NIC. 


If you qualify for the allowance, the Employer’s NIC can be reduced from your PAYE payments until you have reached the £3,000 limit.  For example, if the Employer’s NIC is £2,500 in April no Employer’s NIC will be payable for April and the balance of £500 will be carried forward to offset against your May liability.


Eligibility

You can only claim one allowance per employer. If you have multiple PAYE schemes within a group that are not separate legal entities you must decide which PAYE scheme you wish to claim the allowance against.


Some employers are excluded, for example if you: