Add a company director

Company directors are classed as employees and therefore pay National Insurance on annual income above £12,570. They need to be noted as Directors in your payroll process to ensure the right amount of National Insurance is paid.

Before you begin

Directors can have National Insurance calculated on either the Standard or Alternative methods.

See HMRC’s guidance on National Insurance for company directors.

Standard annual earning periods method - National Insurance is calculated cumulatively. This method is commonly used for directors that are paid irregularly.

1. When a director is paid, calculate their National Insurance liability for the year to date, including bonuses.
2. At the end of the tax year, subtract the total employee National Insurance they’ve paid for the tax year to calculate their outstanding National Insurance dues.

Alternative method - National Insurance is calculated as the tax year progresses. This method is commonly used for directors that are paid regularly.

1. When a director is paid, calculate their National Insurance only for their pay during that period, including bonuses.
2. At the end of the tax year, calculate whether they have any outstanding employee National Insurance due and deduct it from their final payment in that tax year.

For further guidance, see HMRC’s Rates and Thresholds and Online calculator for National Insurance.

How to add a company director

1. From the left side bar, select Employees.
2. Select the relevant employee.
3. On the right side, click Set as director.
4. Enter the start date of directorship and select the National Insurance calculation method from the dropdown menu.
5. Click Set as director.