Employment Allowance

This article will take you through what 'Employment Allowance' is, who is eligible for Employment Allowance and how the allowance can be claimed via KashFlow Payroll.

What is Employment Allowance

This is an amount which is given by HMRC to employers in the Class 1 National Insurance category.

The allowance is a total of £3000 for the entire financial year and if any amount of the £3000 has not been claimed by the financial year end, then the employer can contact HMRC directly and claim the remaining allowance.

IMPORTANT: of the full £3000 is not claimed via KashFlow Payroll (due to low PAYE employer NI due), you will need to contact HMRC, as mentioned above

Who can claim Employment Allowance

Employers that are eligible to apply for 'Employment Allowance' are businesses or charities, as well as community amateur sports clubs.

Who cannot claim Employment Allowance

If you are a company with only paid director, if you hire a nanny or gardener and so on.

How to claim Employment Allowance through KashFlow Payroll

In order to indicate KashFlow Payroll to make Employment Allowance deduction from the employer NI payment, you will need to make sure that the 'Employment Allowance' option is ticked, before finalising the pay period.

The option can be enabled by going to: Company > Setup Details > Government

Once a pay period has been finalised after applying the 'Employment Allowance' indication, KashFlow Payroll automatically sends an RTI EPS to HMRC informing that the company will be claiming Employment Allowance.

NOTE:

To view the report with the 'Employment Allowance' deduction applied, please visit the following webpage: https://kashflowpayroll.zendesk.com/hc/en-us/articles/115000463006-Payments-Report

For more information please visit HMRC website.

https://www.gov.uk/claim-employment-allowance