Directors are classed as employees, and their earnings are subject to National Insurance. They pay NICs on annual income from salary and bonuses over £8,164. Contributions are worked out on their annual earnings rather than from their monthly or weekly pay. Check out National Insurance for Company Directors.
To add a company director
- Add an employee or select an existing employee. See Add employees in QuickBooks Online Standard Payroll.
- In the Tax Information section, choose Yes for Company Director.
- For Appointment date, select the effective date this person was appointed as the company director.
- Select the Calculation method for the Directors National Insurance.
- Save your changes.
To remove a company director
If a director is leaving the company, follow the same steps as you would for a regular leaver.
Make sure you prepare a P45 and give a copy to the employee. After you’ve paid the employee for the last time, tell HMRC by deleting the Director’s NIC calculation method entry in the FPS. Deduct any NI the director owes from their last payment.
If the director is staying on as a regular employee:
- Go to the the Employees or Payroll menu.
- Select the employee.
- In the Tax Information section, choose No for Company Director.
The employee will continue to pay NI as a director until the end of the current tax year (6 April).