Directors Payroll
PAYROLL FOR DIRECTORS
PAYROLL FOR DIRECTORS
Whilst Directors of a Limited Company are also shareholders, they are an employee of the company rather than being considered ‘Self-Employed’, and can be paid via PAYE. Depending upon their circumstances, many Directors choose to receive salary up to either their non-taxable allowance, or the point at which Class 1 National Insurance would be deducted, and take the rest of their income as dividends.
Directors National Insurance
There are differences with the way a Director’s National Insurance is calculated, and the best method can be chosen based on whether the Director will be paid regularly or intermittently.
Directors can choose to be paid either monthly, quarterly or annually and submissions made to HMRC need to reflect this.
Directors Payroll
PayrollAbility can manage Directors payroll, ensuring that the correct submissions are made to HMRC during the year if a Director is paid intermittently, ensuring trouble-free flexibility as your business grows.
Our comprehensive service includes:
- Standard payroll payment calculation and income tax and national insurance deduction.
- Electronic pay slips emailed to you.
- Completion of your monthly electronic return to HMRC.
- Reports for your records, which will be provided directly to you and a third party or accountant at your request.
- Confirmation of the amount to be paid to HMRC each month, and a reminder of the date that it’s due.
- Year End Process, including P60 emailed directly to you.
- 14 day credit terms on each invoice
Automatic Enrolment
A Limited Company with only one Director is usaully exempt from Automatic Enrolment obligations, however we will help you determine whether you have Automatic Enrolment duties, and support you in ensuring you are complaint. If the Company appoints other Directors this may alter your Automatic Enrolment obligations, and any employees recruited who are not Directors will certainly alter your obligations. We can advise and support you through this process, from helping you to choose a pension provider and setting up the pension scheme, to ensuring your employees are provided with complaint and informative communication and administering the scheme each pay period.
Contact Us For Directors Payroll
We’d love to speak to you to learn a little about your business and discuss how we can help you. With Director Payroll starting at £30.59* per month a call to the office today on 01384 92 90 20 for a no-obligation discussion can give you time and peace of mind to focus on the business.
*Standard fee for 2023-24 tax year
Do directors need to be on payroll?
Directors don’t need to be on payroll. However from a tax efficiency and state pension perspective many Directors choose to have payroll processed for themselves.
How do I pay myself as a director?
If the Director is the only employee on payroll, they will often choose to process a monthly gross salary aligned with Primary Threshold (£9,096.00 per year, £758.00 per month in the 2024-25 tax year) Aligning the gross salary with PT creates a National Insurnace credit for the Director’s state pension, but does not create an employee or employer National Insurance liability. Depending on the Director’s tax code, there may be a tax deduction. However if the Director is on the standard tax code for the year (1257L for 2024-25) there will be no tax deduction.
If the company has other employees and is eligible to claim Employers Allowance it may be worth the Director considering salary up to their tax free allowance (based on their tax code) Employers Allowance is a relief offered to small employers. It allows the offset of the first £5,000.00 of employers National Insurance in each financial year, reducing that liability for the business. A payroll provider can predict whether this will be personally beneficial to the Director, and the company based on the previous year’s payroll. The business’ plans for employee recruitment and pay increases for the coming year should also be taken into account, but if possible will give the Director the opportunity to take a higher salary without employees National Insurance being deducted, and without causing an employers National Insurance liability for the business.
How is a directors salary paid?
Directors can take a salary via PAYE with the rest of their earnings being taken as dividends.
Dudley
DY2 8AB
