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UK limited-company guide

Can I put my spouse or partner on payroll through my limited company?

Work out whether the role is genuine, what pay you can defend and how salary, Income Tax, National Insurance and Corporation Tax interact in 2026/27.

UK limited companiesReviewed 22 July 2026Based on GOV.UK guidance

Use the tax figures to understand a real job—not to invent one.

Start with: identifiable duties, actual hours, an appropriate rate and the same employment controls you would apply to an unrelated employee.

Then check: the partner’s other income, National Minimum Wage, employer NI, Employment Allowance, pensions, benefits and the company’s Corporation Tax position.

The short answer

Yes—if the job, pay and payroll are genuine.

Your limited company can employ your spouse or partner. They must perform real work, their pay must be commercially reasonable for that work, and you must keep employment records and operate PAYE where required.

A salary may reduce company profit while moving income to a partner with unused allowances. It is not automatically tax-efficient: the result also depends on their other income, employer National Insurance, Employment Allowance and the company’s Corporation Tax position.

They perform genuine work and have little or no other income

Potentially worthwhile

They only work occasionally

Use a smaller, proportionate salary

They do no identifiable work

Do not put them on payroll

Local-only route guide

What should happen before a spouse or partner goes on payroll?

Choose the closest facts. This educational guide stores nothing and does not decide your company’s tax or legal position.

Is your spouse or partner doing real work for the company?

2026/27 worked illustration

See each part of the tax picture.

Amara’s company pays Daniel £1,047.50 a month for genuine administration, bookkeeping preparation and customer-support work worth £12,570 a year. Daniel has no other income and the full Personal Allowance.

This shows the salary deduction only. Employer NI may still arise above the £5,000 secondary threshold. Employment Allowance, pension costs, the profit that would otherwise remain and the company’s actual Corporation Tax rate can change the household result.

Illustrative salary and tax amounts for Amara and Daniel
Annual salary	£12,570
Employee Income Tax	£0
Employee National Insurance	£0
Salary received before any other deductions	£12,570
Corporation Tax reduction from salary at 19%	£2,388.30

No other incomeSome or all of the Personal Allowance may be available.

Already earning £25,000The extra salary normally creates Income Tax, and employee NI depends on pay in this employment.

Higher-rate taxpayerIncome shifting may offer little benefit, even though genuine employment can still be appropriate.

Reasonable salary illustration

Test the pay against the work and the tax effects.

Start with a real role, hours and reasonable pay. The figures are a simplified 2026/27 illustration for England, Wales or Northern Ireland—not a payroll calculation or personal tax recommendation.

1. Define the work

Role

Hours worked each week

Used to show the annual hourly equivalent at 52 weeks.

2. Set the proposed pay

Proposed annual salary

3. Add the financial context

Partner’s other taxable annual income

Include employment, pension, self-employment and other taxable income. The actual PAYE result depends on the tax code used for this job.

Already employed elsewhere?

NI is generally calculated separately for each employment.

Company profit band

Associated companies can reduce these profit limits.

Employment Allowance available?

A second name on payroll does not automatically create eligibility. Check how it works.

Annual employer pension contribution (optional)

Paid into the pension, not to the employee as cash. Tax relief and pension limits depend on the circumstances.

View your illustration

Illustrative result

This salary may be reasonable based on the entered hours

£12,570 is equivalent to £13.43 an hour for 18 hours each week. Confirm that the duties and market rate support this amount.

Estimated company cost after tax relief

£11,101

Annual salary

£12,570

Effective hourly rate

£13.43

£12,570 ÷ 936 entered annual hours

Based on 18 hours × 52 weeks. Paid holiday is included in annual salaried employment; 52 weeks should not be treated as 52 weeks of productive time without further consideration.

Partner’s estimated take-home pay: £12,570
Total company cost before tax relief: £13,706
Estimated Corporation Tax reduction: £2,604
Estimated company cost after tax relief: £11,101

Estimated tax relief is not the household’s total tax saving. The final advantage depends on how the company profit would otherwise have been retained or withdrawn.

Employer National Insurance

Calculated employer NI: £1,136
Covered by available Employment Allowance: −£0
Estimated employer NI payable: £1,136

Pay at or above the £6,708 Lower Earnings Limit may help build a qualifying NI year, depending on the partner’s wider record.

Assumes a standard category A employee, annualised pay, non-savings income and no student loan, benefits, salary sacrifice or statutory payments. Payroll software and professional advice should be used for real decisions.

Your practical next steps

What you would need to do next

Based on the entries above, prepare the job and payroll record before the first payment.

1Define and document the administration role.
2Record the agreed 18 weekly hours.
3Support the £13.43 hourly equivalent with market-rate evidence.
4Create written employment terms and complete the starter process.
5Pay £1,047.50 monthly through the company bank account and PAYE.
6Keep work, holiday, payroll and payment records.
7Assess workplace-pension duties.
8Record why Employment Allowance has not been included.

Advanced explanations

Open the detail that affects your calculation.

Income Tax and employee National Insurance

The standard Personal Allowance and annual employee NI primary threshold are both £12,570 for 2026/27. Other income can use the allowance before this salary. NI is normally assessed separately for each employment, while tax codes and Scottish Income Tax can change the PAYE result.

Corporation Tax

A genuine salary incurred for the trade can reduce taxable company profit. The small-profits rate is 19% below £50,000 and the main rate is 25% above £250,000, with marginal relief in between. Associated companies can reduce those limits. The salary deduction is not the same as a household cash saving.

Employment Allowance

An eligible employer can offset up to £10,500 of employer Class 1 NI in 2026/27. A single-director company cannot claim when that director is the only employee liable for employer NI. Adding a spouse does not automatically create eligibility: the work must be real, their earnings must create the relevant liability and all other eligibility rules still apply.

2026/27 rates and thresholds ↗Employment Allowance eligibility ↗Corporation Tax marginal relief ↗

What salary can you reasonably pay your spouse?

The right salary starts with the role, the hours and reasonable market pay. A tax threshold can help you understand the consequence of that salary; it should not be used to create pay for work that was not performed.

Assess the proposed pay using:

hours actually worked;
complexity and responsibility;
experience or qualifications required;
local and sector market rates;
the company's treatment of comparable employees;
whether the working pattern and output support the amount.

For most workers aged 21 or over, the National Living Wage is £12.71 an hour from 1 April 2026. A limited company should not assume that the family-member minimum-wage exception applies: the company is a separate legal person and does not itself have a family.

Keep evidence of how you chose the rate. A round salary at a tax threshold is not evidence that the amount is commercially reasonable.

Genuine roles and the evidence each one can produce

Possible role	Examples of work evidence
Administration	Inbox management, diary entries, documents and data-entry records
Bookkeeping support	Processed invoices, organised receipts and reconciliations prepared for review
Customer support	Support emails, call notes, tickets and CRM updates
Marketing assistant	Approved posts, newsletters, campaign records and website updates
Operations support	Supplier correspondence, order records and documented procedures
Payroll assistant	Timesheet collection and payroll preparation under appropriate access and approval controls

The title is not the evidence. Keep regular records of the tasks, time and output. If the partner handles payroll, money or sensitive employee information, document access controls and independent approval too.

Benefits beyond an immediate tax effect

National Insurance record

Earnings at or above the £6,708 Lower Earnings Limit for 2026/27 may help the employee build a qualifying National Insurance year even when employee NI is not deducted. State Pension entitlement depends on their wider NI record, so check that record before treating this as a benefit.

Workplace pension and employer contributions

Marriage does not itself remove workplace-pension duties. Age, earnings, employment status and the wider workforce determine whether automatic-enrolment duties apply.

An employer contribution to a registered pension may be a separate planning option. Its tax treatment depends on the contribution being incurred for the trade and on the wider facts; do not treat a pension contribution as interchangeable with salary without advice.

A formal work and income history

Regular, genuine employment creates a clearer record of responsibilities and pay. It may also create an income history, but payroll should never be manufactured to support a mortgage or other application.

Add your spouse to payroll in six controlled steps

1. Decide their status and role

Establish whether they will be an employee, worker, director or shareholder. Write a job description with duties, reporting line, start date and expected working pattern.

2. Agree defensible pay and written terms

Record the hours or output expected, the rate, pay frequency, holiday entitlement and how changes will be approved. Check National Minimum Wage using the working-time rules that apply to the job.

3. Complete the starter process

Collect the normal starter declaration and secure employee information. Register as an employer if the company needs a PAYE scheme. Do not put invented or incomplete information into payroll simply to meet a preferred payday.

4. Assess pension and insurance duties

Complete the workplace-pension assessment and record the result. Check employer's liability insurance separately; an insurance exemption does not remove payroll, minimum-wage or employment-rights duties.

5. Run PAYE and report on time

Calculate Income Tax, employee NI, employer NI, pensions and any other deductions through payroll software. Give a payslip, make the company-bank payment and submit the Full Payment Submission on or before payday.

6. Review the arrangement

Keep work and hour records, review the salary when duties or hours change, record holiday, and follow the normal leaver process if the work ends. Never keep paying the old amount because it happens to match a tax threshold.

Check these consequences before deciding

A genuine job can still change the household or employer position. Check:

Universal Credit and other means-tested benefits;
student-loan and postgraduate-loan deductions;
High Income Child Benefit Charge;
maternity, paternity and other statutory-payment eligibility;
holiday entitlement and holiday pay;
National Minimum Wage;
workplace-pension assessment;
employer's liability insurance;
PAYE registration, tax codes and RTI submissions;
what happens when the partner leaves or changes hours;
whether the partner will also become a director or shareholder;
separation of personal transfers from company salary, dividends and loans.

When employing your partner may not be worthwhile

There is no identifiable work for the company.
The duties are occasional but the proposed salary assumes regular hours.
Their other income already uses the Personal Allowance and puts more pay into a higher tax band.
Employer NI, pension costs or benefit changes outweigh the expected advantage.
The company cannot support the pay with commercial-rate and work evidence.
The arrangement is mainly intended to reach a tax threshold, obtain Employment Allowance or create an income record.

Genuine employment may still be operationally useful even when it produces little tax advantage. The tax result and the employment decision are related, but they are not the same decision.

Common mistakes

No real role: nobody can explain what the person does or show completed work.
Starting with £12,570: the salary is chosen before the duties, hours and rate.
Assuming family means exempt: limited companies still need to check minimum wage, pensions and employer duties.
Treating Employment Allowance as automatic: a second name on payroll does not itself make a single-director company eligible.
Using personal transfers as wages: salary should move from the company with a matching payroll record and payslip.
Ignoring other income: a second job, pension or other taxable income can change the tax result.
Backdating the paperwork: historic informal payments should be reviewed before they are labelled as wages.
Mixing salary and ownership: dividends, director duties, loans and employee pay need separate decisions and records.

Frequently asked questions

Can I pay my spouse £12,570 a year?

Only if the role, actual hours and reasonable rate support £12,570. That figure is the 2026/27 standard Personal Allowance and employee NI primary threshold, not a recommended spouse salary.

Does my spouse pay tax if they already have another job?

Usually the new salary uses whatever Personal Allowance and tax bands remain after their other income. HMRC may issue a different tax code for the second employment. Employee NI is generally calculated for each employment, subject to exceptions and deferment rules.

Does the company pay employer National Insurance at £12,570?

Normally yes: the 2026/27 employer secondary threshold is £5,000 and the standard employer rate above it is 15%. An eligible employer may offset employer NI with Employment Allowance, but eligibility and the amount still available must be checked for the company as a whole.

Can adding my spouse make the company eligible for Employment Allowance?

It can change the single-director exclusion only where the spouse is a real employee whose earnings create employer Class 1 NI liability, and the company meets all other rules. Adding them to payroll or paying below the secondary threshold is not enough by itself.

Do we need timesheets?

There is no single universal record format for every job, but flexible or part-time family work needs credible evidence. Timesheets, calendars, task logs and completed output can collectively show what was done and support the pay.

What if my spouse is also a director or shareholder?

Separate their employment duties and salary from director decisions, dividends, benefits and share ownership. Director NI, pension and company-law questions may need tailored advice.

Sources

Defensible records pack

Show what they did, when they did it and why the pay was reasonable.

A job title and payslip are not enough on their own. Keep the employment record and the work evidence together.

Download checklist

Written job description, contract, start date and reporting line.
Agreed hours, rate and evidence supporting that rate.
Timesheets, recurring work records and completed outputs.
Starter declaration and PAYE registration details.
Payslips, FPS submissions and company-bank payments.

Holiday records and workplace-pension assessment.
Minimum-wage and employer-liability insurance checks.
Annual salary and role review.
Board minute if the partner is also appointed as a director.
Separate records for dividends, loans, benefits and pension contributions.

When to speak to an accountant or adviser

Escalate before a complex arrangement becomes a payroll correction.

Get tailored advice for director or shareholder appointments, dividends, benefits, salary sacrifice, material pension contributions or marginal-relief calculations.

Backdated pay, informal historic payments, statutory pay, termination, disputed status and unusually high pay for limited hours need controlled specialist review.

Put the controls into practice

Follow the same payroll route as any other genuine hire.

Collect starter records, check pension duties, approve gross pay and report the payment on or before payday. The guide helps you prepare; it does not create or process the employment.

Explore the Payroll Academy Add a new starter Check pension duties

Workmax payroll

Keep employee records, approved inputs and payroll review connected.

Workmax supports connected employee records, approved hours, payroll review, RTI reporting and payslips so a family hire can follow the same disciplined process as every other employee.

Explore Workmax Payroll