If you pay your wife a salary from your limited company, do you need to tell HMRC? Even if she only earns a small amount for doing some admin work, there are payroll and reporting rules you need to be aware of.
This guide has been updated by the IT Contracting team to reflect the current 2026/27 tax and National Insurance thresholds.
Do you need to tell HMRC?
Your wife would not normally need to contact HMRC herself simply because you start paying her a salary. However, your limited company, as the employer, may need to operate PAYE and report the payments to HMRC, depending on the amount she is paid and her circumstances.
If your company already runs PAYE, just add your wife to the payroll and report her pay as usual. If it doesn’t, you’ll normally need to register as an employer if she earns £96 or more a week in 2026/27, has another job or pension, or receives taxable expenses or benefits.
You can pay your spouse a salary, but it must be for work they actually perform for the company. The amount you pay should also be reasonable for the job.
Reporting your wife’s salary through PAYE
Historically, employers reported wages using forms such as the P35 and P14. These have now been replaced by Real Time Information (RTI).
This means your company must submit details of your wife’s pay to HMRC each time she is paid, using a Full Payment Submission (FPS), where the company is required to operate PAYE.
National Insurance thresholds
For 2026/27, the Lower Earnings Limit (LEL) is £559 per month, while the Primary Threshold, at which most employees start paying National Insurance, is £1,048 per month.
If your wife earns between the LEL and the Primary Threshold, she won’t normally pay employee National Insurance, but her earnings still count towards her National Insurance record, including for State Pension purposes.
However, the employer’s Secondary Threshold (ST) is lower, at £417 per month in 2026/27. This means the company may have to pay employer’s National Insurance on salary above this level, even where your wife pays no employee NIC herself.
This is often used as part of a wider salary and dividends strategy for family-run limited companies.
Even where no employee tax or NIC is due, reporting the salary correctly can ensure your wife receives National Insurance credits towards the State Pension and certain other benefits where her earnings are at or above the relevant level.
You can check the latest thresholds on GOV.UK here: National Insurance rates and thresholds.
Important considerations
The salary should always reflect the actual work carried out. Paying a spouse a wage purely to reduce tax or make the most of their unused basic tax band, without real duties, may be challenged by HMRC.
It’s also worth ensuring that:
- the work is clearly defined (e.g. admin, bookkeeping, invoicing)
- the pay is reasonable for the tasks performed
- payments are made through the company payroll system where PAYE applies
If your spouse does genuine work for the company, you can pay them a reasonable salary for it. See our separate guide to paying your husband or wife a salary from your limited company for more on the tax and payroll rules.
About the Author
James Poyser is the CEO at inniAccounts, an award-winning online accountancy service for contractors and consultants.