Did you know that, as an employer, you may for two forms of support to reduce your business costs and payments to HMRC?

Employment Allowance allows you to claim back part of your Employer National Insurance bill, while Small Employers’ Relief helps you reclaim more than 100% of statutory parental pay.

Employment Allowance

If you're an employer that pays Class 1 National Insurance for your employees, you can use the Employment Allowance to offset part of your Employer National Insurance bill:

In the 2024/2025 tax year, you can claim up to £5,000.
From the 2025/2026 tax year onwards, you can claim up to £10,500.

Here’s how it works:

If your Employer National Insurance bill exceeds the allowance (e.g., £6,000 in 2024/2025 or £12,000 in 2025/2026), you’ll only pay the difference.
If your bill is less than the allowance (e.g., £2,000), you won’t pay any Employer National Insurance. However, you can't reclaim any unused allowance.

You can claim your Employment Allowance at any point during the tax year. Please refer to HMRC's guidance to check if you're eligible.

Small Employers' Relief

If your gross National Insurance bill (both employee and employer) for the previous tax year was less than £45,000 before deducting Employment Allowance, you may qualify for Small Employers’ Relief (SER). This allows you to reclaim more than 100% of any statutory parental pay you provide:

Up to 5 April 2025: Claim 103% (100% plus an additional 3%).
From 6 April 2025: Claim 108.5% (100% plus an additional 8.5%).

To check your eligibility, please refer to HMRC's guidance.

Example calculation

You pay £600 in statutory maternity pay to an employee this month.

Without Small Employers' Relief

Without Small Employers' Relief, you can claim 92% of the amount paid.

£700 x 92% = £644

With Small Employers' Relief

With Small Employers' Relief, you can claim 100% of the amount paid, and 3% compensation.

£700 x 100% = £700

+ £600 x 8.5% = £59.50

A total recoverable amount of £600 + £59.50 = £759.50

Set up in PayFit

To set up Small Employers' Relief:

From the left, choose Company settings, then HMRC information.
Under the Employer registration details section, click Edit details.
Under the Settings section, toggle on the Company qualifies for Small Employers' Relief option.
Click Save.

To set up Employment Allowance:

From the left, choose Company settings, then HMRC information.
Under the Employer registration details section, click Edit details.
Under the Settings section, toggle on the Claim employment allowance option.
Click Save.

Your Small Employers' Relief and/or Employment Allowance is shown on the employer payment record report, and reduces your overall amount due to HMRC. To view this report:

From the left, choose Reports, then Company reports.
Under the Payroll reports selection, click Employer payment report.
From here, you can choose to download the report as a PDF or Excel file.