The employment allowance is an employer benefit that helps you reduce your national insurance (NI) liability by up to £5,000. Each time you run your payroll you pay less employers’ Class 1 National Insurance until the £5,000 has gone or the tax year ends, whichever is sooner.
From the 2025 new tax year: The employment allowance for the 2025 to 2026 tax year is £10,500, announced in the October 2024 budget statement. This is an increase from £5,000 in the previous tax year.
If you claim employment allowance you need to apply again at the start of each tax year, as it doesn't carry over between tax years.
Click Settings then click Payroll Settings.
In the Employer status section, click Edit.
Select whether your company is a small employer.
If you select this option, you need to select the I understand that this may mean that Paycirle won't match HMRC check box.Select if your company is entitled to employment allowance.
Enter the amount of allowance you've claimed to date.
If you haven't claimed anything so far in the tax year, leave the value as £0.00Enter the employer's NI eligible for employment allowance to date.
Select the I understand that this may mean that Paycirle won't match HMRC check box.
In the Business sector list, select one of the following options:
Employer is in the agriculture sector.
Employer is in the fisheries and aquaculture sector.
Employer is in the road transport sector.
Employer is in the industrial sector.
State aid rules do not apply to employer.
Only select that state rules don't apply if your company doesn't undertake any economic activity, for example, a charity, a community amateur sports club, or employ someone to provide personal care.
To set your company as automatically eligible each year, turn on the Auto-reclaim toggle.
Click Save.
Set employment allowance across a PAYE scheme
If you have multiple companies on the same PAYE scheme, you need to set them up with the same employment allowance settings. For example, if you have a weekly and monthly company on the same PAYE scheme, set them both as eligible for employment allowance. If you have year to date figures to add, split them across the all companies on the scheme.
Note: Enter the year to dates for each company on the scheme based on how much each company has claimed to date, and how much employers' NI you've processed.