Expenses and benefits: training payments

Printable version

1. Overview

As an employer providing training expenses for your employees, you have certain tax, National Insurance and reporting obligations.

What’s included

• the cost of training
• related costs, eg books or travel expenses while training

2. What's exempt

You don’t have to report anything to HM Revenue and Customs (HMRC) or pay tax and National Insurance if the employee is in work-related training.

3. What to report and pay

If training expenses aren’t exempt, you may have to report them to HM Revenue and Customs (HMRC) and deduct and pay tax and National Insurance on them.

What you need to report and pay depends on who arranges and pays for the training.

The amount to report and pay is the cost of the training plus any related costs like books or travel expenses.

If you arrange and pay for the training

You must:

• report the cost on form P11D
• pay Class 1A National Insurance on the cost to you

If you pay for training arranged by the employee

You must:

• report the cost on form P11D
• pay Class 1 National Insurance (but not PAYE tax) through payroll

If you reimburse an employee who has arranged and paid for the training

The amount you reimburse them counts as earnings. You’ll need to:

• add the amount to the employee’s other earnings
• deduct and pay PAYE tax and Class 1 National Insurance through payroll

4. Technical guidance

The following guides contain more detailed information:

• employment income: further education and training costs - introduction

• Class 1 National Insurance: Earnings of employees and office holders: Training and similar costs - contents