Employment Allowance for a dental practice: £10,500 off employer National Insurance, and how many nurses it covers

A practice takes on a second nurse, then a third, and the payroll bill grows. Employer National Insurance is part of that bill, and the Employment Allowance can take a large slice of it away. GOV.UK says the allowance "allows eligible employers to reduce their annual National Insurance liability by up to £10,500". We read the allowance pages and the 2026 to 2027 rates page on 24 October 2026.

What the allowance is

The rules we read:

• You can claim it only against employers' Class 1 National Insurance, up to £10,500 each tax year.
• The Class 1 bill falls with each payroll run "until the £10,500 has gone or the tax year ends (whichever is sooner)".
• You can still claim if your liability was below £10,500.
• "You need to claim Employment Allowance every tax year." You can claim at any point in the year, but the earlier you claim, the sooner you get it.
• You may be able to claim for the previous four tax years, back to 2021 to 2022.

The rates page gives the 2026 to 2027 employer rate for category A as 15%, with a secondary threshold of £5,000 a year (£417 a month, £96 a week).

Who can claim

From the eligibility page: you are a business or public body that does less than half its work in the public sector. Charities can claim. Only one company in a group of connected companies can claim, and only against one payroll. Anyone whose earnings fall under IR35 off-payroll rules, and anyone employed for personal, household or domestic work, cannot be included. If the practice is a company with a single director, that director must not be the only employee liable for secondary Class 1 National Insurance, so a second paid employee over the threshold matters.

An associate dentist who is self-employed is not on your payroll, so does not add to the bill. Check how each person is engaged before assuming.

How far £10,500 goes: six headcounts

Our calculation uses one full-time nurse on the 2026/27 National Living Wage of £12.71 for 37.5 hours a week. That is £476.625 a week, £24,784.50 a year over 52 weeks.

Employer National Insurance per nurse: £24,784.50 minus £5,000 is £19,784.50, and 15% of that is £2,967.675, shown as £2,967.68.

The allowance runs out at £10,500 divided by £2,967.675, which is 3.54 nurses. The fourth nurse is the first to cost the practice employer National Insurance, and then only £1,370.70 in the year, not the full £2,967.68. These figures cover basic pay only, with no overtime, bonuses or part-year starters, and are rounded to the penny.

Pay a receptionist or hygienist more and the allowance stretches over fewer people. The wage used here comes from our guide to the minimum wage for dental receptionists and nurses from April 2026.

What else sits on top

Employer National Insurance is only one cost of a hire. Employer pension contributions follow the rules in our guide to pension auto-enrolment for dental staff, and sick pay costs are in statutory sick pay for dental staff. Where a practice is deciding whether a hire is affordable, the full yearly cost of regulators and fees is in CQC, GDC and ICO fees for a dental practice.

What we did not read

We did not read the page on how to claim, so we say nothing about the steps or software. We did not read the rules for the £100,000 condition beyond the single line on the eligibility page. Rates for categories other than A, such as employees under 21 or apprentices under 25, were not read; they can lower the figures above.

Overlyft builds AI staff who join the team, and one of them can do this specific task: work out each month, from the payroll figures, how much of the allowance is left and when it will run out, for the practice manager to check and approve.

This is general information, not advice. Check the GOV.UK pages and take advice from your accountant before you act.