Home / Questions / What Is the Employment Allowance?
Last updated 23 October 2026. Written by the Limited Company Accountant UK team, part of Accotax. Figures are for the 2026/27 tax year; always check GOV.UK for the latest rates.
Short answer: The Employment Allowance reduces your employer National Insurance bill by up to £10,500 a year. It is not available if the sole employee is also a director.
At a glance
| Value | Up to £10,500 |
|---|---|
| Not available | Companies where the director is the only paid employee |
| Claim | Through payroll software |
Who can claim
Employers with at least one other eligible employee and a secondary Class 1 NI bill under £100,000.
How to claim
Tick the option in your payroll software at the start of each tax year.
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The bottom line
The Employment Allowance reduces your employer National Insurance bill by up to £10,500 a year. If you would rather not do it alone, our fixed fees start at £45.83 + VAT a month.
Frequently asked questions
Do sole-director companies qualify?
No, unless they employ another eligible person.
Is it automatic?
No, it must be claimed.
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Our packages start at £45.83 + VAT and cover accounts, tax and deadlines. Get a free quote or call 0203 4411 258.
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