This guide will explain how to create a director within Qtac, and highlight the differences between the director and alternative calculation rules. This guide will focus entirely on Directors, to access general information for entering an employee into QTAC please refer to our How To Enter An Employee guide.

Directors are entered as employees within the payroll. Directors will pay national insurance contributions on total earnings applicable for NI, the earnings are built up of basic pay and any additions that are marked as applicable for national insurance.


National insurance is paid for directors on their earnings over the primary threshold and for an employer on earnings over the secondary threshold. The threshold for the current tax year can be found within 'Help > Rates > NIC Bands'. How the national insurance contributions are calculated depend on the calculation method set when creating the employee record. 

Setting a Director and Calculation Method

Whilst creating the employee record, within the ‘Personal’ tab of Employee Maintenance there is a ‘Director’ section. Within this section you will find three options available. All company directors must be marked as a ‘Director’, and where directorship has commenced part way through a tax year a ‘Start Date’ of their directorship must be completed.


There are two calculation methods (detailed below) that can be used to calculate a director’s national insurance during a tax year. If you wish to apply director NI rules, then the ‘Apply Director NI’ checkbox must be checked. If you wish to apply alternative rules, this checkbox should be unchecked.



A Director's start date only needs to be entered if they became a director during the tax year i.e. any date after the 6th April for the current tax year. 


Once a calculation method has been chosen for a director, and a payment has been performed, the method cannot be changed during that tax year. 


Directors can choose the directors NI calculation method that is used.


Director NI Rules

 When applying director national insurance, their earnings applicable for NI are evaluated on a cumulative basis each period against the per-annum primary and secondary thresholds. Until the per-annum thresholds have been exceeded, no contributions will be taken. 

For example, in a tax year where the per-annum primary threshold is £10,000, and a director is paid £1,000 a month. They will not begin paying NI until month 10. They will then pay the standard rate of NI on all earnings applicable for NI until the end of the tax year.

 This is configured by ticking both the 'Yes?' and 'Director's NI' tick boxes in 'Employee Maintenance > Personal'. 

In this example the employee Tim Director is configured to start the year using a Standard Director's NI calculation.

Alternative Director NI Rules

When applying alternative director national insurance, their earnings are evaluated on a period by period basis, as a normal employee’s national insurance would be calculated.

At the end of the year, or upon leaving employment, the director’s earnings are re-evaluated on an annual basis, ensuring that over the course of the tax year their earnings have had the correct amount of national insurance calculated. 

This means that in their final pay period, where a director has had variable earnings, they may receive a refund or have further national insurance collected. 

In the example that a calculation is being performed in a tax year where the per-annum primary threshold is £10,000, and a director is paid £1,000 a month. With alternative rules applied, the director will have national insurance collected each period, levelling the contributions due to be paid out across the tax year, as opposed to using the allowance at the start of the year and settling the contributions due in the final periods when the primary and secondary thresholds have been exceeded.

 Once the employee has been calculated using one calculation type i.e. Standard and they have been submitted to HMRC they cannot be switched to the other type during the tax year. The only method to change the type of calculation would be to back process the employee to the start of the year, go to employee maintenance > Personal and correct the Director's information before rerunning and resubmitting the payroll.  

Need More Help?

Contact Support

Contact Support

Our team are here to help.



Read our latest blogs on all things Payroll.

Video Tutorials

Video Tutorials

Check out our Video Tutorials.