Optimum salary for director 2013/14 please?

Optimum salary for director 2013/14 please?

Didn't find your answer?

Please could somone tell me how to calculate the optimum salary for director in small business? I know it needs to be over LEL and below PAYE but seem to recall there is an optimum, which I believe last year 2011/12 or 2012/13 not sure which, was £144, opposed to the £107 minimum for NIable earnings? Thank you

Replies (2)

Please login or register to join the discussion.

Euan's picture
By Euan MacLennan
14th Jun 2013 15:44

£148 a week

... may not be the optimum, but it is the maximum that can be paid without having to pay any (employer's) NI contributions.  As it is more than £109 a week, you get the entitlement to a qualifying year for the state pension despite not paying any NIC.

Thanks (0)
avatar
By Paul Soper
14th Jun 2013 16:31

But still report it

Don't forget at the level recommended you should be reporting even though there is no liability.  If the client already has 30 years contributions (better still 35) it may not be necessary to pay at that level, but drop it below £109 at which reporting would not be needed if there are no other employees within the PAYE scheme.

But you will be losing personal allowances at both of these levels - to use the PA in full will now cost NIC at 12% for the director and 13.8% for the company.

If there was a legitimate way of extracting profit as interest this could be used to use the PAs without triggering a tax or NIC liability

Thanks (0)