Employment Allowance
Check if you're eligible
You can claim Employment Allowance if you鈥檙e a business or charity (including community amateur sports clubs) and your employers鈥� Class 1 National Insurance liabilities were less than 拢100,000 in the previous tax year.
You can also claim if you employ a care or support worker.
You can claim Employment Allowance for the previous 4 tax years.
If you鈥檙e part of a group
If you鈥檙e part of a group of charities or companies (also known as connected companies), the total employers鈥� Class 1 National Insurance liabilities for the group must be less than 拢100,000.
Only one company in the group can claim the allowance.
If you have more than one payroll
If you have or had more than one employer PAYE reference, the total employers鈥� Class 1 National Insurance liabilities for your combined payrolls must be less than 拢100,000 in the previous tax year.
You can only claim Employment Allowance against one of the payrolls.
If you make off-payroll payments
Payments to off-payroll workers (for example, contractors) are known as 鈥榙eemed payments鈥�. Do not include employers鈥� Class 1 National Insurance liabilities on deemed payments in your calculations. They do not count towards the 拢100,000 threshold.
Check if de minimis state aid limits apply to your business
For some businesses, Employment Allowance counts as 鈥榙e minimis state aid鈥� (financial support from the government). There鈥檚 a limit to how much de minimis state aid these businesses can get over a 3-year period. If they exceed the limit, they cannot claim Employment Allowance.
De minimis state aid limits are likely to apply to your business if both of the following are true:
- your business is located in Northern Ireland
- your business makes or sells goods or wholesale electricity
If de minimis state aid limits apply to your business, you must:
- work out how much state aid you鈥檝e received in total
- check that you鈥檙e below the limit
You must do this even if your business does not make a profit.
For more information, read the technical guidance on the UK鈥檚 international subsidy control commitments, Northern Ireland Protocol section.
Check you鈥檙e below the de minimis state aid limit
The limit depends on your business sector. It鈥檚 worked out in euros.
| Sector | De minimis state aid limit over 3 years |
|---|---|
| Agriculture products鈥� | 20,000 euros |
| Fisheries and aquaculture鈥� | 30,000 euros |
| Road freight transport | 100,000 euros |
| 滨苍诲耻蝉迟谤颈补濒鈥�/辞迟丑别谤 | 200,000 euros |
Work out how much de minimis state aid you鈥檝e received
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Check if you鈥檝e received any de minimis state aid - if so, you should have been told in writing.
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Add the total amount you鈥檝e received or been allocated for the current and past 2 tax years.
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Add this to the full amount of Employment Allowance for the year you鈥檙e claiming for. You鈥檒l need to convert this into euros using the exchange rate for the end of the previous tax year. If you鈥檙e claiming for 2022 to 2023, you鈥檒l need to use the exchange rate on 30 March 2022: 拢1 to 1.1826 euros.
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If the total is below the limit for your sector, you鈥檙e eligible to make a claim.
If you鈥檙e a connected company, the total de minimis state aid for all of the companies in the group must be below the state aid limit for your sector.
The rules are different if your business covers more than one sector.
Who cannot claim Employment Allowance
You cannot claim if you鈥檙e a public body or business doing more than half your work in the public sector (such as local councils and NHS services) - unless you鈥檙e a charity.
You also cannot claim if your company has just one director and that director is the only employee liable for secondary Class 1 National Insurance.
Employees you cannot include in your claim
Certain employees cannot be included in your claim, such as:
- someone whose earnings are within IR35 鈥榦ff-payroll working rules鈥�
- someone you employ for personal, household or domestic work (like a nanny or gardener) - unless they鈥檙e a care or support worker