Do I need to run payroll for myself as the only director of my limited company?
Direct Answer
Yes — if you pay yourself a salary above the Lower Earnings Limit (£6,396 for 2025/26), you must register a PAYE scheme with HMRC and submit payroll information in real time (RTI). Even if no tax or NI is due, the submission is required. Failure to register or file RTI can result in automatic penalties. Most directors pay themselves £9,100–£12,570, which requires PAYE registration. Setup takes about 15 minutes online; your accountant normally handles it.
Do you need to register for PAYE?
You MUST register if:
Earnings above £6,396/year (£533/month) in 2025/26
Any other payment that triggers PAYE — bonuses, benefits in kind
You DON'T need PAYE if:
You take zero salary (dividends only — no salary at all)
Your only salary is below £6,396/year
Most directors pay themselves £9,100–£12,570 and therefore must have PAYE registered.
How to register for PAYE
Register online at gov.uk
Search "Register as an employer" — takes about 15 minutes.
Receive your references
HMRC will issue your Employer PAYE Reference and Accounts Office Reference within 5 working days.
Set up payroll software
Free options: HMRC Basic PAYE Tools. Or use FreeAgent/Xero which handle it automatically.
Run payroll each time you pay a salary
Produce a payslip and record the payment in your accounting software.
Submit Full Payment Submission (FPS) to HMRC
Due on or before each payment date. Your software does this automatically.
What is RTI (Real Time Information)?
RTI means payroll submissions are sent to HMRC at the time of each payment — not annually. Every payslip requires an FPS submitted electronically. Running payroll monthly = 12 FPS submissions per year.
Late/missing FPS penalty
£100 per month for most small employers who fail to file RTI on time. These are automatic — HMRC does not send a warning first.
2025/26 NI and PAYE thresholds
| Threshold | Annual | Monthly |
|---|---|---|
| Lower Earnings Limit (LEL) | £6,396 | £533 |
| Primary Threshold (employees start paying NI) | £12,570 | £1,048 |
| Secondary Threshold (employers start paying NI) | £9,100 | £758 |
| Basic rate Income Tax threshold | £12,570 | £1,048 |
Key implication: Salary of exactly £12,570
Employee pays zero NI (below primary threshold)
Employer pays NI on £3,470 (above secondary threshold) — ~£479/year
Employee pays zero Income Tax (within personal allowance)
The Employment Allowance
Reduces employer NI by up to £5,000 per year
Not available to companies where the sole employee is also a director (single-director companies)
Available if you have at least one other employee who is not a director — apply immediately if you take on staff
Year-end payroll obligations
| Obligation | Deadline |
|---|---|
| P60 — issued to all employees | By 31 May |
| P11D — reports benefits in kind | By 6 July |
| Employer Payment Summary (EPS) — if no employees paid | 19th of following month |
| Final FPS — marked as final submission | On last payroll date |
Most accountancy packages for Ltd companies include payroll for one director.
Autobooks handles your PAYE registration, monthly payroll and RTI submissions — all included. From £89+VAT/month.