From April 2020 only companies with (Secondary) Class 1 NIC contributions(Employers NI) less than £100,000 are eligible to claim employment allowance. Companies with more than £100,000 (Secondary) Class 1 NIC contributions in the last tax year should not claim employment allowance.
Finding the total (Secondary) Class 1 NIC contributions for the previous tax year
(Secondary) Class 1 NIC contributions are Employers NI Contributions. The total (Secondary) Class 1 NIC contributions can be found by running 'Reports > Pay Period > Payroll Summary' with 'Include All Pay Frequencies' ticked from last year’s payroll software.
The total employers NI is shown in the right most column of the report on the final page.
Note: Include leavers should be ticked and the filters in the top left should be set to 'Company'.
Deemed Payments
Employer NI Liabilities arising from ‘deemed’ such as off payroll workers do not count towards the £100,000 threshold, these payments will be included in the payroll summary. If this applies please use the pay spreadsheet to calculate the total employers NI for non deemed payments. The pay spreadsheet can be exported from 'Reports > Pro Reports > Exports > Pay Spreadsheet'.
Stopping Employment Allowance Claim
If a company exceeded £100,000 (Secondary) Class 1 NIC contributions in the previous tax year, employment allowance should not be claimed for the following tax year.
