If you’re self-employed or run your own limited company and your partner helps out in the business, you might have wondered if you can pay them a wage. Even if they don’t,  maybe you’re looking for smart ways to manage tax and household income more efficiently.

Whatever the reason, this is one of the most common questions accountants get asked, and the short answer is yes, you can. (*There are a few important rules to understand first though).

Yes, you can pay your spouse if it’s legit

If your spouse genuinely works in your business, you can absolutely pay them a wage. It’s no different from hiring any other employee, but HMRC will expect you to treat it the same way, too.

That means:

• They must actually do work for the business
• The pay must be reasonable for the work done
• You must keep proper records, payslips, and payroll reports
• PAYE must be set up if their earnings exceed the threshold

Trying to game the system by paying a spouse who doesn’t work for your business? That’s a red flag, and HMRC can (and does) challenge these arrangements.

The tax benefits of paying your spouse

If done properly, paying your spouse can lead to some smart tax savings. Here’s how:

1. Make use of both personal allowances

Everyone gets a personal allowance (£12,570 for 2025/26) before they pay income tax. If your spouse isn’t using theirs, for example, if they’re not working, you’re missing an opportunity. By paying them a fair wage, you reduce your own taxable income and make better use of your household’s tax-free threshold.

2. Lower your National Insurance bill

Splitting income between two people can reduce the total amount of NI contributions you pay, especially if it keeps you both below certain thresholds.

3. Reduce your corporation tax bill

If you run a limited company, wages paid to your spouse count as a business expense, which means they can reduce your company’s taxable profits.

4. Build up pension or maternity entitlements

If your spouse earns over the Lower Earnings Limit (£6,500 for 2025/26), they may start building up qualifying years for State Pension and other benefits, even if they don’t pay NI.

How much should you pay?

The golden rule is: pay a reasonable wage for the work being done.

For example, if your spouse helps with admin a few hours a week, it would be hard to justify a full-time salary. Paying them a fair hourly rate (based on market value) for actual hours worked? That’s absolutely fine.

Accounting tip: Document the duties, hours, and rate, just like you would with any other employee.

What if you’re a sole trader?

You can still pay your spouse if you’re a sole trader, but the setup’s a little different. The cost of employing them must be “wholly and exclusively” for the business, and again, the wage must reflect the work done.

Alternatively, you could bring them in as a business partner, but that’s a bigger decision, with more legal and tax implications. Talk to an accountant before making that move.

Need help?

We can help ease the pressure in many areas, including business planning, staff management, and ensuring you have the finances to support your plans. Whether you’re thinking about employing your spouse or just want to be more tax-efficient, get in touch. We’re here to help.