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average monthly wage to wife

average monthly wage to wife

I have just taken on a sole trader who pays his wife for (genuinely) helping in the business. The total amount is above the LEL but below the PAYE threshold. The workload varies during the year and during several months she does a lot more work than at other times, though she does something every month.

Is it OK to pay her an averaged monthly wage rather than for the actual hours worked? She will have to pay NICs during some months if the latter.

I know in some jobs such as teaching the pay is averaged over the year despite school holidays etc.

Thanks for any advice.

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By DMGbus
16th Mar 2012 09:13

OK - NMW exemption for family workers

The National Minimum Wage regulations specifically have exemptions for family members working for family businsess, so unliklely to be problems in this respect.

So, then turning to tax deductibility in the husband's accounts  should be no problem here if wife's wage as a whole for a given accounting year are at no more than a commercial rate for that given year.

 

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lionofludesch
19th Mar 2012 11:04

That's a good point about the NMW; so one is saying that they are paid (say) £2 an hour one month and £15 an hour the next month, and that doesn't matter. I was also worried about the NIC avoiding/evading aspect of it - but perhaps the situation is commonplace and HMRC don't argue about it?

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