Can I pay my partner a wage from my sole trader business?

Yes, if they do real work for the business, at a rate you would pay anyone else, and the money actually goes to them. In 2026-27, paying £96 or more a week means registering for PAYE payroll.

If your partner does the quotes, invoices, bookings and phone calls, paying them for that work is a staff cost, and GOV.UK lists staff salaries and employer's National Insurance as allowable expenses. This page covers paying a spouse, civil partner or partner as an employee of your sole trader business, following HMRC's Business Income Manual (BIM) and GOV.UK as checked on 16 October 2026.

The three things HMRC looks at

It must be for the business. HMRC's manual (BIM37735) says the reason for the payment must be wholly and exclusively for the trade. If there is another reason, either as well as or instead of the business, the deduction is not allowable.

The rate must fit the work. HMRC's guidance for construction subcontractors (BIM66220) lists the factors it weighs: where your partner does the work, what the duties are, how much is paid, and whether you have premises away from home. A commercial rate for substantial duties done at premises away from the family home is likely to be allowed. A non-commercial rate for minor jobs done at the family home is unlikely to be. Most cases sit between the two and turn on the facts.

The money must really be paid. In Moschi v Kelly (1952), wages for the trader's wife were refused. They were shown in the accounts but credited to his own drawings account, and there was no evidence they were genuine. HMRC's manual (BIM47130) says that if PAYE has been operated, that should be accepted as sufficient evidence the wages were paid. If you use traditional accounting, pay for a period must be paid within 9 months of the end of that period to be deducted in it. That timing rule does not apply on the cash basis.

Payroll, National Insurance and minimum wage

You must also register for PAYE, whatever the pay, if in the current tax year your partner gets expenses and benefits, has had another job, gets a pension, or has received Jobseeker's Allowance, Employment and Support Allowance or Incapacity Benefit. Registration must happen before the first payday, and you then report pay to HMRC on or before each payday.

The National Living Wage is £12.71 an hour from 1 April 2026 for workers aged 21 and over. GOV.UK lists "family members of the employer living in the employer's home" as not entitled to the minimum wage. HMRC's minimum wage manual (NMWM05160) explains that this covers a family member living at the employer's family home and "participating in the running of the family business". That can apply to a sole trader's spouse or civil partner who lives with them, but not to anyone working for a limited company. It does not make a low rate a good idea: an hourly rate well below what the work is worth weakens the "commercial rate" test above.

What this means for you

Take a self-employed plumber whose partner does the quoting, invoicing, bookings and supplier orders, about 10 hours a week. The plumber pays £560 a month through payroll, £6,720 a year, which works out at about £12.92 an hour.

That is about £129.23 a week, so PAYE applies and the partner's National Insurance record is protected. It is below £242 a week, so no employee National Insurance is due. With no other income, it is below the £12,570 Personal Allowance, so no Income Tax either. Employer's National Insurance is 15% of £143 a month (£560 less £417), £21.45 a month or £257.40 a year, GOV.UK says Employment Allowance, which businesses can claim, reduces employer's National Insurance by up to £10,500 a year, so it would cover this if your business is eligible.

If the plumber's profit stays between £12,570 and £50,270, outside Scotland, the £6,720 wage saves 20% Income Tax and 6% Class 4 National Insurance: £1,747.20 a year. This is an example only.

Steps to pay your partner properly

1. Write down the duties and the hours, as you would for any employee.
2. Set an hourly rate in line with what the work is worth, and check it against the minimum wage.
3. Register as an employer with HMRC before the first payday if the pay or any other trigger means you must.
4. Run payroll each pay period and report it to HMRC on or before payday.
5. Pay the wage from the business account into your partner's own account.
6. Keep timesheets, payslips and payroll reports, and record wages and employer's National Insurance as expenses in your bookkeeping or Making Tax Digital (MTD) software.

Our guide to what tradespeople can claim covers other costs. The free MTD check shows when MTD starts for you, and the trades section has more guides.