Best to pay no salary?

[northernladuk]

how do you mean?

Is the 60k a threshold so max amount or an amount you've chosen based on the money you've got?

[Olly]

Is the 60k a threshold so max amount or an amount you've chosen based on the money you've got?

£60K is the max you can put into a pension and still get tax relief on it - used to be £40k

[Craig@Clarity]

Thanks but why aren't you factoring in employers NI?

There are other things to think about including employees and employer's NI, LEL, primary and secondary thresholds, employment allowance, CT marginal rate etc. A lot of assumptions and scenario's but since we're in a forum, I thought I would be helpful and give some general advice.....

[Craig@Clarity]

£60K is the max you can put into a pension and still get tax relief on it - used to be £40k

Have you factored in carry forward rules?

[Olly]

Have you factored in carry forward rules?

Nah - real contractors max it out every year so not a factor

[WTFH]

Nah - real contractors max it out every year so not a factor

Real contractors have accountants.

[eek]

Got to say I'm looking forward to the advice for 2025/6 - because every calculation I've seen says that if you have 1 other employee it's better to pay yourself via PAYE.

[Andy2022]

Got to say I'm looking forward to the advice for 2025/6 - because every calculation I've seen says that if you have 1 other employee it's better to pay yourself via PAYE.

Got an example?

[eek]

Got an example?

Well you aren't paying employer NI because with an employee you get the £10,000 allowance so paying yourself £50,000 is very simple.

[Andy2022]

Well you aren't paying employer NI because with an employee you get the £10,000 allowance so paying yourself £50,000 is very simple.

Ok with you… so using the Employment Allowance you can have a combined salary of £80k between two employees and as it’s salary CT due will decrease

Assuming 2 employees

EA = 10,500
NI = 15%

10,500 / 0.15 = 70,000

70,000 + 2 x 5,000 = 80,000 (employers NI not due on first 5,000 and assuming 2 employees)