Employers Allowance is relief offered to employers on Employers NI. Any relief on any tax sounds beneficial, but as simple as that sound lets go into it in more details.
As an employer you are required to pay ‘Employers National Insurance’. Employers NI is calculated at a rate of 13.8% of employees’ wages above the Primary Threshold. For 2016-17 the Primary Threshold is £155.00 per week or £672.00 per month. Employers National Insurance is not a deduction from employees’ wages, but an additional amount that each employer has to pay to the government for each employee.
However, from April 6th 2014 Employers Allowance was introduced. The government grant relief (as at 2015-16) on the first £2000.00 of Employers NI. This can be a benefit to employers who may have part-time employees, or those on minimum wage.
Most employers running a business for profit, charities, or people employing a carer in their own home can claim employers allowance. Employers allowance is claimed through your payroll software, and should be part of the standard payroll process.
There are changes to the threshold and eligibility in 2016/17. Please take a look at the update blog which can be found here:
And further information about Employers Allowance can be found on the Gov.UK website here:
https://www.gov.uk/claim-employment-allowance
PayrollAbility will automatically check your eligibility for Employers Allowance and claim it each pay period as part of the payroll process. If you currently run your own payroll and are unsure whether you are entitled to Employers Allowance, or are unsure whether you have claimed it, please call for a non-obligational chat. We are happy to give advice and help you claim your allowance.
