Choose how you will pay yourself
If you are going to pay yourself as a contractor, then you must check to see if you will be subject to IR35 to see if the company will incur employer NIC and have to withhold income tax and employee NI. If you are going to pay yourself through PAYE, then you will need to register the company for PAYE.
Run payroll software to determine the correct amount to pay yourself
Paying yourself is no different from paying an employee. You will need to add your details to the payroll software like ShiftAI's Payroll product. Once you've done that and you've completed all the payroll organisation details in the settings area, you will be ready to calculate the pay for yourself.
Pay yourself the correct net wage
Salary will be calculated by the payroll software, and you should then pay yourself the net wage. The difference between net wage and gross wage will typically be income tax, employer ni, and pre-tax pension which you might have also added to your pay. The company will be charged PAYE for the income tax and NI, and employer NI, and student loan (if any is due).
Pay your PAYE bill
Log into your company's government gateway account and then go to the PAYE bill section and pay your bill. That's it, you're done, and you have run a payroll for yourself.
Other considerations
From 2021, companies that hire contractors through PSC (personal service companies) need to assess if the IR35 rules apply to the work contracts. Recall, for many people who use personal service companies, the income if subject to IR35 should be taxed, have employee and employer NI deducted at source. We have not covered this scenario in this article because we have focused on the PAYE payroll.
