If you’re a director-shareholder of your own limited company and the parent of a teenager aged 14 or over, here’s a smart, totally legal tax move you might be missing:
Put your teenager on the payroll.
3 Powerful Tax Benefits of Employing Your Teenager
1. Personal Tax Savings
You’re already funding your teen’s lifestyle—from phones to concert tickets—after tax. If your company pays them instead, you reduce the salary or dividend you need to draw… Result? Less tax for you.
2. Corporation Tax Relief
Their salary is a deductible business expense, saving you between 19% and 26.5% in corporation tax. That’s cash back into your business.
3. Qualify for the Employment Allowance
Sole director? You don’t usually get the £10,500 Employment Allowance. But if you employ your teen (min £5k salary), you could become eligible— saving £1,136 in Employers’ NI in 2025/26.
The Numbers: Real Tax Savings Example
Example: Total Potential Tax Saving – £4,149
Pay your teen £5,000 → real cost after tax reliefs = £851.
Not bad for work they’d probably do anyway (hello, social media management 📱).
Beyond Tax Savings: Additional Benefits
- They gain real-world work experience
- They earn tax-free income (if under £12,570)
- You keep wealth in the family
- And yes, they’ll appreciate earning their own money
Needs Help?
Don’t leave money on the table when this simple, legitimate strategy could save your family business over £4,000 this year. Take the next step today!
Book a free initial consultation with us to find out how to implement this in your specific situation!
