Plenty of limited companies have exactly one person on the payroll: the director who owns it. The payroll is simple in volume but has its own rules, from the annual National Insurance method to the Employment Allowance exclusion and the pension duties that don't apply until you take someone on. This post covers running the PAYE scheme for that company in the 2026/27 tax year. Our company directors page covers the payslip itself.
Do you need to register as an employer for yourself?
Yes, if the company pays you a salary. GOV.UK's register-as-an-employer page says you must register even if you're only employing yourself, for example as the sole director of a limited company. Most limited companies with 1 to 9 directors can register online.
Register before your first payday to get your employer PAYE reference, but not more than 2 months before you start paying. If the first payday comes before the reference arrives, run payroll, keep the FPS and send it late once you have the reference.
How directors' National Insurance works
Directors' National Insurance is worked out on their earnings for the whole tax year, not pay period by pay period. GOV.UK says directors pay National Insurance on annual income from salary and bonuses over £12,570.
| Method | How it works each payday | At the end of the year |
|---|---|---|
| Standard annual earnings period | Work out NI on total pay for the tax year so far, then take off the NI already paid | Nothing extra; the running total is already annual |
| Alternative method | Work out NI only on this period's pay, including bonuses, like any employee | The software checks the annual position and takes any extra NI from the last payment |
The annual method is why a director's large one-off bonus doesn't escape NI: a bonus in March is added to the year's total, not treated as one month's pay. Your payroll software applies whichever method you choose and reports it to HMRC on the FPS.
The 2026/27 thresholds a director's salary meets
Three National Insurance thresholds shape a director's salary in 2026/27. Employer NI is 15% above the secondary threshold, employee NI is 8% between the primary threshold and the upper earnings limit, and pay from the lower earnings limit protects the director's NI record.
| Annual salary | Threshold | Employee NI | Employer NI at 15% | NI record |
|---|---|---|---|---|
| £5,000 | Secondary threshold | £0 | £0 | Below the £6,708 lower earnings limit: no qualifying year from this job |
| £6,708 | Lower earnings limit | £0 | £256.20 (15% of £1,708) | Treated as paid |
| £12,570 | Primary threshold | £0 | £1,135.50 (15% of £7,570) | Treated as paid |
GOV.UK says that between £129 and £242 a week, contributions are treated as having been paid to protect your National Insurance record. A salary of £12,570 also uses up the 2026/27 Personal Allowance, so with tax code 1257L and no other income there is no income tax on it. Which level suits you depends on your company's profits, dividends and your other income, which is a question for your accountant.
Can a one-director company claim Employment Allowance?
No, not while you're the only one paid above the secondary threshold. GOV.UK's eligibility page says that if your company has only one director, they must not be the only employee liable for secondary Class 1 National Insurance. The allowance, worth up to £10,500 in 2026/27, becomes available once another employee's pay creates employer NI.
What you send to HMRC each month
- Each payday: send a Full Payment Submission (FPS) on or before the day you pay yourself, even if the salary is below the thresholds.
- A month you don't pay yourself: send an Employer Payment Summary (EPS) instead, by the 19th after that tax month ends.
- A run of months with no pay: you can tell HMRC in advance on an EPS, entering a period of inactivity of 1 to 12 months.
- Paying HMRC: anything due goes by the 22nd of the next tax month (19th if you pay by post), or quarterly if HMRC has agreed it.
- Year end: mark your last FPS of the tax year as the final submission (or send the final report on an EPS if you paid nothing in the last pay period), and give yourself a P60 by 31 May.
GOV.UK says a missing EPS can bring an HMRC estimate of what you owe or a penalty, so a regular monthly salary is often easier to manage than paying yourself irregularly.
Minimum wage and pensions for a sole director
GOV.UK lists company directors among those not entitled to the National Minimum Wage, so a director's salary can sit below it. The Pensions Regulator says a company with a sole director and no other staff has no automatic enrolment duties, and that you should tell it you're not an employer using its online form.
Both change when you hire. Your first employee brings minimum wage rules, automatic enrolment duties and, in most cases, eligibility for Employment Allowance.
Where PayDocs fits
PayDocs doesn't run your PAYE scheme or send an FPS. It makes the payslip for each payment and the P60 copy at year end from the figures in your payroll software, for directors who want a clear record of salary, tax and NI. PayDocs works out PAYE income tax, National Insurance and supported deductions for 2026/27 pay dates. Previewing is free; a PDF is £3.99 per payslip once checkout opens.
This is general information about the rules for employers in the UK, not tax or legal advice.
Questions
Do you need to register as an employer for yourself?
Yes, if your company pays you a salary. GOV.UK says you must register even if you're only employing yourself, such as the sole director of a limited company, before your first payday and not more than 2 months ahead.
How is a director's National Insurance worked out?
On annual earnings. Under the standard method, each payday you work out NI on pay for the tax year so far and deduct what's been paid. Directors pay employee NI on salary and bonuses over £12,570 in 2026/27.
Can a one-director company claim Employment Allowance?
No, if the sole director is the only employee liable for employer National Insurance. Once another employee's pay creates employer NI, the company can usually claim up to £10,500 for 2026/27.
What if I don't pay myself in a month?
Send an EPS instead of an FPS by the 19th after that tax month. If you know you won't pay anyone for a while, you can report a period of inactivity of up to 12 months on the EPS.
Does a sole director need a workplace pension?
The Pensions Regulator says a company with a sole director and no other staff has no automatic enrolment duties. You should tell it you're not an employer, and the duties start when you take on staff.
Sources
- GOV.UK: Register as an employer
- GOV.UK: National Insurance for company directors
- GOV.UK: Rates and thresholds for employers 2026 to 2027
- GOV.UK: National Insurance
- GOV.UK: Employment Allowance, check if you're eligible
- GOV.UK: Running payroll, reporting to HMRC (FPS)
- GOV.UK: Running payroll, Employer Payment Summary (EPS)
- GOV.UK: Pay employers' PAYE
- GOV.UK: Payroll annual reporting, send your final payroll report
- GOV.UK: PAYE forms P45, P60 and P11D, P60
- GOV.UK: National Minimum Wage, who gets the minimum wage
- The Pensions Regulator: I'm the only director of my own company, do automatic enrolment duties apply to me?
Sources checked 8 October 2026. This article explains how pay documents work; it is not tax or legal advice.
