How to Enable Employment Allowance

What is Employment Allowance?

Employment Allowance is a government initiative that allows eligible employers to reduce their annual Class 1 National Insurance (NI) liabilities by up to £5,000. This allowance is designed to support businesses, particularly small and medium-sized enterprises (SMEs), by lowering employment-related costs.

Am I eligible for Employment Allowance?

For eligibility information, visit the UK Government's Employment Allowance page.

When Should You Start Claiming?

You must claim Employment Allowance every tax year (April 6 to April 5). While you can submit your claim at any point during the tax year, claiming early ensures that you receive the allowance sooner, providing immediate reductions to your NI liabilities.

How do I enable Employment Allowance in FreePayroll?

From the home screen, click on the "Company" section in the left-side menu, and then click on the "Allowances" subsection.
You will see a box labeled "Employment Allowance" with a button.
- If the button says "Stop," then Employment Allowance is already enabled.
- If the button says "Enable," then Employment Allowance is off. You can turn it on by clicking the button.
A popup will open:
- If you migrated from another software where you were already claiming Employment Allowance, enter the amount you have already claimed.
- Otherwise, simply click the "Enable" button.

Updated on: 27/10/2024