Employment Allowance Calculator, 2026/27
Small employers often leave employment allowance unclaimed simply through not checking eligibility each year. Enter your total employer NIC bill and this calculator shows how much of the allowance you can use and what employer NIC remains payable.
The employment allowance calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. The employment allowance is worth up to £10,500 a year for 2026/27, offset against employer Class 1 NIC only. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under payroll, paye & employment. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Employment allowance used
Employer NIC still payable
Unused allowance (cannot be refunded)
Maximum annual allowance
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
The employment allowance directly reduces the employer NIC a business would otherwise pay, up to a maximum of £10,500 in a tax year. It is claimed through payroll software, offsetting each month's employer NIC liability until the allowance is used up or the tax year ends, whichever comes first.
If total employer NIC for the year is below the allowance, the balance simply cannot be claimed against anything else, it is not refundable and does not carry forward to the following tax year, which is why the calculator shows any unused amount separately.
Connected companies, businesses under common control, share a single allowance between them and must choose which one claims it, so groups with several small companies cannot claim the allowance multiple times.
Who can and cannot claim
The most common exclusion for small companies is having only one employee paid above the secondary threshold, and that employee also being a director, which blocks the claim entirely. Adding a second employee, even part time, above the secondary threshold generally restores eligibility from that point.
Employers must also have been within state aid limits relevant to their sector in the past, and total employer NIC in the prior tax year must not have exceeded £100,000, which is designed to exclude larger employers from the relief.
Claiming and correcting the allowance
The allowance is claimed by ticking the relevant box in payroll software (an Employer Payment Summary submission to HMRC) at the start of the tax year, or as soon as eligibility begins, it does not apply automatically.
If eligibility changes partway through the year, for example a second employee joins, the claim can usually still be backdated to the start of the tax year in most payroll software, so it is worth checking mid-year rather than assuming the opportunity has passed.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
How much is the employment allowance for 2026/27?
Up to £10,500 a year, used to reduce the employer Class 1 National Insurance a business owes across the tax year.
Why can't my one-person limited company claim it?
Because the rules exclude companies where the only employee earning above the secondary threshold is also a director. Adding another employee above that threshold usually restores eligibility.
Does unused employment allowance carry forward?
No. Any part of the allowance not used against employer NIC within the tax year is lost; it cannot be carried forward or refunded in cash.
Do connected companies each get their own allowance?
No, connected companies under common control share one allowance between them and must nominate which company claims it for the year.
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