£500.77 per month

[kingcook]

You can earn up to the secondary NI threshold and no NI will be due, and that's currently £136 a week, which equates to £7,072 = £589.33.

You could try running it through a payroll program, or the free HMRC software to see how it works.

HM Revenue & Customs: National Insurance Contributions

Thanks Clare! This is exactly what i needed.

[Tanya@SC Lee Accountant Ltd]

we usually suggest our cusomers 602 /month

My accountant last year recommended that i take out £500.77 per month as salary, and the rest as dividends. This also means (i think) that i still get build up a state pension, yet don't pay any NI (or income tax).

This year i plan on using one of those online web 2.0 accountants, but i have to set my salary.

Any ideas where the £500.77 amount is calulated from? $some_allowance / 12 = £500.77??

Should it be a different amount this year due to tax allowance increases?

[JamJarST]

we usually suggest our cusomers 602 /month

Why do you suggest that? One line advice like yours is useless without a real justification.

I get the impression you are just spamming the board so that people get to see your name all over the place.

[Clare@InTouch]

Why do you suggest that? One line advice like yours is useless without a real justification.

I get the impression you are just spamming the board so that people get to see your name all over the place.

£602 a month is £7,224 a year, which is nigh on the level for the Primary NI threshold of £7,228 (£139 per week).

If you put that into a payroll program though it will create a small NI liability. £589 a month won't as it's based on the Secondary NI threshold (the point at which you get credit for NI without paying it) of £136 a week.

http://www.hmrc.gov.uk/rates/nic.htm

NI Calculator on the HMRC website here if you want to try it at £602 and £589 http://www.hmrc.gov.uk/calcs/nice.htm

[JamJarST]

£602 a month is £7,224 a year, which is nigh on the level for the Primary NI threshold of £7,228 (£139 per week).

If you put that into a payroll program though it will create a small NI liability. £589 a month won't as it's based on the Secondary NI threshold (the point at which you get credit for NI without paying it) of £136 a week.

HM Revenue & Customs: National Insurance Contributions

NI Calculator on the HMRC website here if you want to try it at £602 and £589 HM Revenue & Customs: National Insurance calculator 2011-12

Thanks Claire

[Tanya@SC Lee Accountant Ltd]

We are sorry to make you have this impression.
We will give more detailed answer next time with justification.

Why do you suggest that? One line advice like yours is useless without a real justification.

I get the impression you are just spamming the board so that people get to see your name all over the place.

[blacjac]

We are sorry to make you have this impression.
We will give more detailed answer next time with justification.

Why not do that now and justify your post about £602 per month?

[Slumdog]

So maybe I have been mis-advised. I currently take approx 1000pm.

Am I losing a lot by paying this salary to myself?
Should I reduce this to the amounts suggested on this post?

[Taxless]

So maybe I have been mis-advised. I currently take approx 1000pm.

Am I losing a lot by paying this salary to myself?
Should I reduce this to the amounts suggested on this post?

By going over the suggested minimum you are paying more employers and employees NIC and PAYE tax than is strictly necessary, but your company will pay less in Corporation tax.

Is the £1,000 gross before employees NIC & PAYE, how much do you draw in dividends (if any), how much (net of tax) do you require to meet your ongoing committments each month.

You seem to imply that you use an accountant, so I would suggest that you ask them whether the remuneration package they have suggested is the most beneficial for you and ask about the use of minimal salaries and dividends.

On the back of their answers you can decide if their advice is worth the money you are paying for it.

[Slumdog]

By going over the suggested minimum you are paying more employers and employees NIC and PAYE tax than is strictly necessary, but your company will pay less in Corporation tax.

Is the £1,000 gross before employees NIC & PAYE, how much do you draw in dividends (if any), how much (net of tax) do you require to meet your ongoing committments each month.

You seem to imply that you use an accountant, so I would suggest that you ask them whether the remuneration package they have suggested is the most beneficial for you and ask about the use of minimal salaries and dividends.

On the back of their answers you can decide if their advice is worth the money you are paying for it.

Taxless, yes I do use an accountant. This figure was suggested to me prior to the accountants. It was directed as a means of showing that the yearly income was a reasonable amount.

But if I can use the suggested amounts then I would do so. This sum that I take is gross and the total year end(salary and divs) is aimed at keeping it under the higher tax threshold.