A worked caveat: employer National Insurance
Paying a salary of £12,570 takes your spouse's earnings above the Secondary Threshold of £5,000, which is the point where employer National Insurance starts to apply. At the current employer rate of 15%, that could mean a liability on the portion between £5,000 and £12,570, unless it's covered by the Employment Allowance, which shelters up to £10,500 of employer NI a year for eligible employers.
Whether you qualify depends on your business structure and who else you employ, so it's worth checking eligibility before assuming the full £2,514 saving will land in full. Our explainer on the rise in employer National Insurance covers how the Secondary Threshold and Employment Allowance interact in more detail.
The good news is that most spousal employment set-ups do qualify. There's a well-known restriction that blocks single-director limited companies from claiming, but HMRC is explicit that it only bites when the sole director is the only person paid above the Secondary Threshold.
If you're a sole trader employing your spouse, the restriction doesn't apply to you at all, since sole traders don't pay employer NI on their own earnings in the first place. If you run a limited company and your spouse is employed as a non-director earning above £5,000, the company becomes eligible too, because the payments are no longer going solely to the director. It only genuinely excludes you if you're a sole director paying yourself alone above the threshold, which isn't the scenario this article is about. Our explainer on the rise in employer National Insurance covers how the Secondary Threshold and Employment Allowance interact in more detail.
There's a genuine upside buried in this too: paying a salary between the Lower Earnings Limit and £12,570 can build your spouse a qualifying year towards their State Pension, even where no National Insurance is actually due. That's a benefit worth factoring in alongside the pure tax saving.
