Pay your partner or children through your business

The minimum wage and tax rules apply across the UK. The child employment rules cover England and Wales, with Scotland and Northern Ireland shown where they differ.

When a relative counts as a worker

A relative is a worker if they have a contract to do work for you personally and you are not their customer. The contract can be written, spoken or implied. Being family does not change this, and regular hours for regular pay look like a contract.

Your spouse or civil partner can instead join you as a business partner. A partner takes a share of the profit and is taxed on that share, not paid wages.

Minimum wage for family members

A relative who is a worker gets at least the minimum wage, including your spouse, an adult child, a parent or a sibling.

Regulation 57 of the National Minimum Wage Regulations 2015 removes work done in relation to the employer's family household from the minimum wage. The exemption is narrow, and a relative who lives elsewhere never qualifies.

A live-in au pair, nanny or care companion who is not family also gets the minimum wage.

A child below school leaving age has no minimum wage entitlement. In England and Wales, a young person can leave school on the last Friday in June if they turn 16 by the end of that summer's holidays. From then, the rate for their age applies.

Pay a relative through payroll

Treat an employee who is a relative like any other employee. You normally need to register as an employer with HMRC before the first payday. Report their pay each time you pay them and give them a payslip.

If you pay a couple a joint wage, record it as two separate wages. Keep separate payroll records for each, split the pay between them for tax and National Insurance, and ask HMRC for an individual tax code for each. Employees under 16 do not pay National Insurance.

Deducting a relative's pay

HMRC compares what you pay with what you would pay someone unconnected doing the same job, looking at duties, hours and qualifications.

Pay the wages into the relative's own bank account on the agreed dates. Keep written terms of the job, a record of their hours or duties and the bank transfers. HMRC can refuse the deduction where there is no evidence of real work.

Employing your children

Your own children come under the same child employment law as anyone else's. A child is anyone still of compulsory school age. Councils make byelaws that add to the national limits: they can raise the minimum age, ban some kinds of work and require a permit.

Councils can require a permit for your own child working in the family business, paid or not. Birmingham, Derbyshire and Haringey all do. Contact your council's education department before the child starts work to find out what it requires.

Byelaws can let a 13 year old do light work in set categories, let a child work up to one hour before school, and let a child aged 14 or over work for their parents in street trading. Working without a required permit risks leaving you uninsured for accidents involving the child.

Light work is work that is not likely to harm the child's safety, health or development, or their schooling. Young workers aged 16 and 17 follow different safety and working time rules.

Rules due to change

Until regulations under the Children's Wellbeing and Schools Act 2026 take effect, today's limits and byelaws apply. In Wales, the Welsh Ministers set the start date.

Employers' liability insurance

In Great Britain, you do not need employers' liability insurance for an employee who is your close relative, unless your business is a limited company. You must insure every other employee.

Relatives of a company director

A company has no family and no family home, so the household exemption is never available to it. A relative who works for your company under a contract is a worker and gets the minimum wage. The company can deduct their pay only if it passes the same wholly and exclusively test that applies to a sole trader.

A relative must be 16 or over to be appointed a director. An appointment below 16 is void.

A company with one director who is its only employee liable for secondary National Insurance cannot claim Employment Allowance. A relative on your payroll who earns enough to be liable means the director is no longer the only such employee.

Giving your spouse or civil partner shares in your company is a separate route from paying wages. The settlements rules can treat dividends from the shares as your income, not theirs.

Where to get help

Ask the Acas helpline whether a relative counts as a worker or is entitled to the minimum wage. Ask the HMRC employer helpline about payroll and tax relief. Ask your council's education department about child employment permits.

In Northern Ireland, ask the Labour Relations Agency about employment rights and the Education Authority about permits.