Payroll Costs – Employer national insurance contributions

From April 2025 the Government reformed the employment allowance, which is a relief that essentially discounts national insurance contributions.

Your Charity may now be able to claim the employment allowance, which was increased from £5,000 to £10,500. The previous £100,000 eligibility threshold for claiming this allowance has been removed.

Who is Eligible?

To claim the allowance for your charity, you must meet the following baseline requirements:

• Registered Employer: You must be registered as an employer with HMRC.
• Employee Minimums: You must have documented employees – or two or more directors – earning above the secondary threshold for Class 1 National Insurance contributions.
• Exclusions: You are disqualified if your only liable employees are directors, or if your charity is treated as “connected” to another business or charity that is already claiming the allowance (you must share a single £10,500 allowance across connected entities).

How to Claim

The allowance is not applied automatically; you must activate it via your regular payroll process.

Please check with your payroll provider or your internal payroll team, if they have claimed this on your behalf.

If you have any questions, then please feel free to get in touch with James Alesbury on 023 8046 1222 or email James Alesbury.