Best salary for 2017/18

[northernladyuk]

What do you think it is?

Apologise to my old man first, and then I'll tell you.

[AtW]

Nixon Williams are saying £8,160 is.

And I say £1,000,000 salary is much better...

[WordIsBond]

If there are two employees through your company, I'd recommend one on a salary of £11,500 and the other on £8,170 per annum. As this way, you can take advantage of the Employment Allowance. Then take dividends thereafter.

Care to explain why the second would be £8170? Seems like it should be either £8164 or £11,500. And since the Employment Allowance would be sufficient to cover Employer's NI for two employees at £11,500 (and to spare), why is £11,500 good for Employee #1 but not for Employee #2? But if not £11,500, then why would you go over £8164 to £8170? That makes no sense to me at all.

Full disclosure: I'm one of those annoying people who doesn't trust his accountant and verifies stuff.

Are you telling us to be cheap and sexist and underpay our spouses without any good tax justification for doing so? What happened to income equality? Haven't you been listening to the politicians?

[SeanT]

Could the rules here be any more confusing?? https://www.gov.uk/government/public...loyer-guidance

[SeanT]

And I say £1,000,000 salary is much better...

Especially if your business is basically funded by the taxpayer and is currently making a loss, but we don't know of any examples like that now do we?

[Michael at BI Accountancy]

Care to explain why the second would be £8170? Seems like it should be either £8164 or £11,500. And since the Employment Allowance would be sufficient to cover Employer's NI for two employees at £11,500 (and to spare), why is £11,500 good for Employee #1 but not for Employee #2? But if not £11,500, then why would you go over £8164 to £8170? That makes no sense to me at all.

I believe Louisa has noted £8,170 as in order for a company to be eligible for the employment allowance it must have two employees over the secondary ni threshold (£8,164).

Certainly if you can justify paying employee #2 the £11,500 then it makes sense to utilise the employment allowance on that salary also.

[WordIsBond]

Thanks, Michael, that makes sense.

[Louisa@AardvarkAccounting]

I believe Louisa has noted £8,170 as in order for a company to be eligible for the employment allowance it must have two employees over the secondary ni threshold (£8,164).

Certainly if you can justify paying employee #2 the £11,500 then it makes sense to utilise the employment allowance on that salary also.

Yes that's exactly where the numbers came from.

Thank you for clarifying that one

[Drei]

LTD with 2 people, we did £1000 a month each so that was actually £12k a year so £24K for two people. Don't mind a little extra NI, Employee Contribution is claimed back on the £24k.

Would be nice to know what the optimal salary would be for 1 man company that cannot claim EC. On £12K as a 1 man, I would pay £98 on Tax, £460 on NI and £530 on ENI. Total £1087.89

If I take £8200 then it goes NI £4.32, ENI £4.97 and pay corp tax at %19 on £3800 which means that I would pay £731.29.

This results in a saving of £356.7...

[TheCyclingProgrammer]

Would be nice to know what the optimal salary would be for 1 man company that cannot claim EC.

That has already been answered in this thread.