Setting Up a Director

Director's NIC

By default, BrightPay will automatically apply the Annual Basis for NIC calculation for Directors, as this is the preferred method of collection by HMRC. The pro-rata version is only recommended when a Director's periodic salary will consistently exceed the equivalent periodic UEL in each pay period AND ONLY where the Director will be paid for the entire tax year as a Director.

This means the Director will not start to pay employee NIC until they reach the PT (primary threshold) of £9,500. For more information on Directors' NICs and the alternate way to calculate NICs for directors, please see the help section on Directors' NIC which you can access here.

Setting Up A Director in BrightPay

To set up an employee as a director, click 'Employees':

1) Select the Employee from the employee listing, or if it is a new employee choose 'New employee'

2) Within the employee record, select their 'Tax/NICs/RTI' section

3) Tick to indicate that the employee is a director

4) Start/End of Directorship - If the director starts/ends their directorship during the tax year, enter these dates accordingly

5) Should you wish to apply the Pro-Rata basis for calculation of the Director's NIC as opposed to Annual Basis, tick 'Use alternate method for calculating directors' NICs'

6) Click 'Save Changes'