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What Are the Eligibility Criteria for Employment Allowance?

Find out if your business qualifies for up to £10,500 off your National Insurance bill

Employment Allowance allows eligible employers to reduce their Class 1 National Insurance liability by up to £10,500 per year (2025/26 tax year).

This relief is applied directly through payroll if you meet the qualifying criteria.


✅ Who Can Claim?

You may be eligible if:

  • You’re a business or registered charity

  • You have more than one employee earning above the secondary National Insurance threshold
    (£9,100 per year for 2025/26)

  • OR you have two directors, and at least one is paid above the threshold

  • Your business does not primarily operate in the public sector


❌ Who Cannot Claim?

You cannot claim Employment Allowance if:

  • You are a single-director company and that director is the only employee earning above the threshold

  • More than 50% of your business activities are for the public sector

  • You employ someone for personal or household work (e.g. a nanny or housekeeper in a private home)


📎 Need More Detail?

You can find the full eligibility rules directly from HMRC here:
👉 HMRC: Employment Allowance eligibility


💬 Want Us to Check Your Eligibility?

If you're not sure whether your company qualifies:
💬 Contact us here and we’ll help review your setup.