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Directors National Insurance Payments

Directors National Insurance Payments


Outlining the key differences between how and when company directors pay National Insurance on their salary compared to other staff.

The question often arises as to why a director doesn’t have any National Insurance (NI)  liability on his or her salary but a non-director employee does have to pay NI. Our technical director, John Mumford explains

A- .Directors and non-directors are treated differently for NI purposes. Directors do not pay until they have gone past cumulative salary of £8060. They then pay full NI on all gross salary. If a low salary level is being run through the company for the Director it is likely that there won’t be any deductions until February. Non-directors get 1/12 of £8060 free from NI every month. Over the course of a full year you will both the Director and employee will pay the same, if of course their salary level is the same

Furthermore contributions are worked out from their annual earnings rather than from what they earn in each pay period.

For more information visit-  www.gov.uk/employee-directors