What's covered in this guide?:
Directors Pay
Directors have different NIC rules than standard employees. Once marked as a director in payroll, their NICs will be calculated using HMRC’s director-specific rules, which take into account:
The date of their appointment as a director
The chosen NIC calculation method
This ensures NICs are correctly calculated over the tax year and reflected in official submissions and reports.
Set Up a Director
To set up a director:
Go to: Staff > Employee > Payroll > Tax Information
Enable Director Status: Tick the checkbox “Yes”
Enter Directorship Start Date:
Add the official date the employee became a director.Tick the checkbox for:
“Use alternative method for calculating directors' NICs” if you want to use the alternative method, which calculates NICs on a per earnings period basis (e.g. weekly or monthly), just like regular employees.Click 'Save' to save changes
Directors Pay on Payslips and Reports
Once a director is set up:
Payslips:
NICs will be calculated using the director’s selected method and shown clearly in the deductions section.P60s:
Year-end totals will reflect correct NIC for directors.FPS submissions:
The director’s NIC information will be submitted to HMRC accurately, based on their status and method.