Are employee health checks tax-free? A guide for UK employers

Most employee benefits come with a tax bill attached. Health checks are an exception. If the company pays for them directly, one health screening per employee per tax year is free of income tax, free of National Insurance and doesn’t need reporting to HMRC.

This guide explains the rule, what counts, and the catches that can turn a tax-free benefit into a taxable one. It’s a plain-English summary of HMRC’s published guidance, not tax advice, so check anything specific to your business with your accountant.

The short answer

• Income tax: exempt for one health-screening assessment and one medical check-up per employee per tax year, under section 320B of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA).
• National Insurance: no Class 1 or Class 1A National Insurance on an exempt check.
• Reporting: nothing to report on a P11D for an exempt check.
• Corporation tax: staff welfare spending is generally allowable as a business expense.
• The main catches: more than one check of each type in a tax year, salary sacrifice, and checks for family members.

The rule: section 320B ITEPA 2003

Section 320B says: “No liability to income tax arises in respect of the provision for an employee, on behalf of an employer, of a health-screening assessment or a medical check-up.”

The law defines both terms:

• A health-screening assessment is “an assessment to identify employees who might be at particular risk of ill-health”.
• A medical check-up is “a physical examination of the employee by a health professional for (and only for) determining the employee’s state of health”.

The exemption covers one of each per tax year. A typical employee health check, with blood tests, blood pressure, body composition and a lifestyle review, fits these definitions. HMRC’s guidance on the exemption is in its Employment Income Manual at EIM21765.

National Insurance and reporting

An exempt health check doesn’t attract National Insurance. HMRC’s National Insurance Manual lists “medical check ups or health screening provided by employer” as not liable to Class 1 or Class 1A National Insurance, for one check-up or screening a year (NIM13150).

There’s also nothing to report. For exempt health benefits, gov.uk says employers “do not have to report anything to HMRC” (gov.uk).

HMRC’s National Insurance guidance describes the screening as generally available to employees. The income tax exemption itself has no such condition, but offering health checks on the same terms to everyone, or to a clearly defined group, is the simplest way to stay on the right side of both.

The catches

The exemption is generous, but a few situations take a health check outside it.

More than one in a tax year. The exemption covers one health-screening assessment and one medical check-up per tax year. If your business is part of a group, the limit applies across the whole group, not per company. A second health check in the same tax year would normally be a taxable benefit, so plan annual checks around the tax year, which runs from 6 April to 5 April.

Salary sacrifice. Since April 2017, benefits provided through salary sacrifice (HMRC calls these optional remuneration arrangements) lose their tax exemptions, apart from a short protected list. Health checks aren’t on that list. If an employee gives up salary in exchange for a health check, they’re taxed on at least the salary they gave up (gov.uk). For a tax-free benefit, the company should pay for the checks directly.

Family members. Check-ups for an employee’s partner or family are a taxable benefit for the employee, unless that family member is also employed by the same employer.

Treatment isn’t screening. The exemption covers finding out about someone’s health, not treating it. A separate rule, section 320C, allows up to £500 a year of medical treatment tax-free, but only when it’s recommended in writing by an occupational health service to help someone return to work after at least 28 days off sick.

Is it deductible for the company?

Generally, yes. HMRC’s Business Income Manual says: “You should allow expenditure incurred directly by a trader on the welfare of their employees, unless of a capital nature” (BIM47070). Health checks for staff are a typical example of that kind of spending. Your accountant can confirm how it applies to your business.

What that means in practice

Here’s a worked example using our Essential pilot day, which covers ten employees for £1,150, or £115 per person.

The example uses 2026/27 rates for a basic-rate taxpayer earning above the National Insurance thresholds. Higher-rate taxpayers lose more of a cash payment, so the health check is even better value for them.

How we can help

We run employee health checks at your workplace across London and the South East. Each employee has an appointment of around 30 to 45 minutes, depending on the package, with venous blood tests analysed by UKAS-accredited laboratories, in-clinic measurements and a one-to-one lifestyle review. Every employee receives a personal report, and you receive an anonymised summary of the group.

Our health checks are a wellbeing benefit, not occupational health. If you’re not sure which your business needs, our guide to employee health screening vs occupational health explains the difference.

See our corporate health screening page for packages, pilot day pricing and how an on-site day works.