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A note for paid subscribers.

What is the optimal monthly or weekly salary that can be paid by an employer without incurring a liability for employer or employee National Insurance Contributions (NICs)?

Look up National Insurance rates for 2020/21:

Taking advantage of the increased £4,000 NICs allowance in 2020/21

See Employers’ NIC allowance for the different variations.

Tax planning for company owners

Tax saving in the UK also involves managing the increased burden of tax penalties and administration.

Payrolls are now filed under Real-Time Information (RTI) reporting. Due to automatic penalties under RTI, most employers will see the benefit from taking a route which minimises administrative burdens and the risk of penalty.

An employer can register an annual scheme for RTI. This may be suitable for owner-managed companies where the director(s) pays a one-off salary, perhaps within the limits suggested above.

What is the optimal level of salary and dividend to pay and still remain a basic rate taxpayer?

Don't overlook the requirements of the National Minimum Wage. There are special rules for directors.