The levy will be payable alongside monthly payments of PAYE and Class 1 national insurance contributions (NICs) at a rate of 0.5% of the employer’s pay bill. An annual allowance of £15,000 is available, which means that employers only have to pay the levy when their annual pay bill is greater than £3m. The annual pay bill is the amount on which Class 1 NIC is payable.

Special rules apply for connected employers, with the effect that only one allowance is available for use between them. It is clearly important to ensure that the allowance is utilised in the best way.