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.
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:
- Employ an employee for personal, household or domestic work such as a nanny or care worker
- Already claim the allowance through a connected company or charity
- Are a public authority (this includes; local, district, town and parish councils)
- Carry out functions either wholly or mainly of a public nature (unless you have charitable status) e.g. NHS, GP or prison services, local council or government services etc.
Please note it is your responsibility to confirm to that you are eligible to claim the Employment Allowance. If you wish Pay Check to apply the offset please use the link to complete the National Insurance Employment Allowance (NIEA) confirmation form: