Employment status

Employment status of company directors

Executive directors of limited companies, as office holders, are classed as employees of the company. Class 1 employee and employer National Insurance contributions (NICs) must be paid, the directors are taxed through PAYE (Pay As You Earn) in the same way as other employees and they have the same rights under employment law as employees.

For information on NICs for directors, see our guide on Class 1 National Insurance contributions.

Non-executive directors may be regarded as employed by the company or self-employed under a contract for services, depending on the terms and conditions of engagement.

However, regardless of their executive or non-executive status, company directors have a number of additional responsibilities under company law and in relation to the completion of self-assessment tax returns.

Self-employed people who convert their business to a limited company usually become directors of the company as well as employees of the company.

The law is complex and you should take advice if you are unsure of your employment status or that of someone who works for you.

Subjects covered in this guide

• Introduction
• Workers and employees
• Am I legally classed as self-employed?
• Employment status of company directors
• IR35 and other special rules

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