Employment allowance increased to £5,000

As part of the spring statement initiatives, the Chancellor, Rishi Sunak, has announced an increase to the Employment Allowance from £4,000 to £5,000

Employment Allowance is a relief which allows eligible businesses to reduce their employer National Insurance contributions (NICs) bills each year

Around 495,000 businesses (30% of all businesses) benefit from the increase, including 50,000 businesses (3% of all businesses) which will be taken out of paying NICs and the Health and Social Care Levy entirely

This means that from April, 670,000 businesses will not pay NICs and the Health and Social Care Levy due to the Employment Allowance.


This change will be a surprise to the payroll software developers who have already undertaken release of software for April 2022. Employers may need to wait fir a subsequent software update to enable payroll to reflect the change.

PAYadvice.UK 23/3/2022

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