Small Employer Relief is designed to support smaller businesses by reimbursing the cost of certain statutory payments, along with an additional percentage to cover associated costs. It helps ease the financial burden of employee leave and can significantly improve cash flow for eligible employers.
HM Revenue and Customs’ (HMRC’s) Software Developer Support Team (SDST), has announced that the Small Employers Relief rate of compensation is to be increased to 8.5% in 2025-26.
This means that employers who paid less than £45,000 in Class 1 National Insurance (ignoring reductions such as the Employment Allowance) in the last full tax year qualify to claim 100% of the below statutory payments, plus an additional 8.5% compensation.
This applies to:
It is confirmed that the £45,000 threshold will remain the same. GOV.UK guidance will be updated soon.
Comments