When a director’s salary goes through payroll
GOV.UK says that if you want the company to pay you or anyone else a salary, expenses or benefits, you must register the company as an employer, “even if you’re only employing yourself, for example as the only director of a limited company.” You register before the first payday, and not more than two months before you start paying people.
From then on, each salary payment is real payroll: the company records the pay, deducts Income Tax and National Insurance, produces a payslip and reports the payment to HMRC on or before payday.
How directors’ National Insurance works
HMRC’s booklet CA44, National Insurance for company directors, sets an annual earnings period for directors. National Insurance is worked out on the director’s total earnings for the tax year against the annual thresholds, rather than on each week or month on its own. For 2026/27 the annual thresholds are:
| Threshold | Annual amount | What happens above it |
|---|---|---|
| Primary Threshold | £12,570 | Director pays 8% up to the Upper Earnings Limit |
| Upper Earnings Limit | £50,270 | Director pays 2% on earnings above it |
| Secondary Threshold | £5,000 | Company pays 15% employer NI above it |
CA44 offers two ways to collect it. Under the standard method, NI at each payment is the NI due on the year’s earnings so far, less the NI already paid this tax year. Under the alternative arrangements, the director pays NI each payday like other employees, and the annual calculation is done at the last payment of the year.
A worked example
A director with category letter A is paid £1,500 a month in 2026/27, £18,000 for the year, under the standard method:
- Months 1 to 8: earnings to date reach £12,000, still under the £12,570 Primary Threshold, so the director’s NI line is £0.00.
- Month 9: earnings to date are £13,500. NI is 8% of the £930 above the threshold: £74.40.
- Months 10 to 12: £120.00 each, 8% of the full £1,500.
- Year total: £434.40, the same as 8% of (£18,000 − £12,570).
The employer NI follows the same pattern against the £5,000 Secondary Threshold: £1,950 for the year, 15% of £13,000. On a payslip that is easy to misread as a mistake, so the year-to-date figures matter.
Making a director’s payslip in PayDocs
- Have the figures for this payment from your payroll: salary, tax code, PAYE, National Insurance and any pension.
- Enter the company and director details and the pay date.
- Enter the National Insurance figure from your payroll. Where PayDocs calculates NI, choose the company director option and the method your payroll uses, and enter the earnings and NI earlier in the tax year.
- Check the year-to-date totals against your payroll, then choose a layout.
PayDocs doesn’t cover directors appointed during the tax year, who have a shorter (pro rata) earnings period under CA44. Use the NI figure from your payroll for them. PayDocs doesn’t report to HMRC or pay HMRC; your payroll still does that.
Salary, dividends and directors’ loans
GOV.UK lists three ways to take money out of a limited company: salary, expenses and benefits through payroll; dividends paid to shareholders out of profits, each with a dividend voucher; and directors’ loans. Only the salary goes on a payslip. How to split salary and dividends is a tax decision for you and your accountant.
Questions
Why is there no National Insurance on my director’s payslip?
Under the standard annual method, a director pays no employee NI until their earnings for the tax year pass the £12,570 Primary Threshold (2026/27, category A). After that, NI appears and catches up on the year’s earnings above the threshold.
Does a director get a P60?
Yes, if they are on the company’s payroll on 5 April. GOV.UK says to give a P60 to every employee on your payroll who is working for you on the last day of the tax year, by 31 May.
Can I put dividends on a payslip?
No. Dividends are paid to shareholders, not through payroll, and are recorded with a dividend voucher. A payslip shows salary paid through PAYE.
Is a director’s payslip proof of income?
A PayDocs document isn’t proof of income. If a lender asks about a director’s income, ask them which documents they accept; many ask for accounts or tax calculations as well as payslips.
Sources
- HMRC — CA44 National Insurance for company directors
- HMRC — Rates and thresholds for employers 2026 to 2027
- GOV.UK — PAYE and payroll for employers: register as an employer
- GOV.UK — Running payroll
- GOV.UK — Running a limited company: taking money out of a limited company
- GOV.UK — Payroll: annual reporting and paperwork: give employees a P60
Official sources checked 4 October 2026. This guide explains how pay documents work; it is not tax or legal advice.
