---
title: "Setting up directors' NI"
slug: "how-do-i-set-up-directors-national-insurance-ni-in-the-system"
description: "Learn about directors' NI calculations, methods, and how to manage their salary effectively for accurate tax assessments in your company."
updated: 2026-07-29T09:26:23Z
published: 2026-07-22T09:54:00Z
canonical: "help.cintra.co.uk/how-do-i-set-up-directors-national-insurance-ni-in-the-system"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://help.cintra.co.uk/llms.txt
> Use this file to discover all available pages before exploring further.

# Setting up directors' NI

### What is directors’ NI?

While normal employees are assessed for NI (National Insurance) on their earnings each pay period, due to large fluctuations in their monthly salary, directors are assessed for NI on their total earnings for the tax year.

There are two methods to calculate directors’ NI:

1. **Standard annual earnings period method**: Recalculates NI based on everything earned this tax year each time they're paid. This is commonly used for directors with irregular monthly salaries.
2. **Alternative method**: Similar to standard employees, the director pays the appropriate NI on whatever they are paid each pay period, with a final reconciliation made at the end of the tax year. This is commonly used for directors with regular monthly salaries.

For more information, see [National Insurance for company directors -](https://www.gov.uk/employee-directors) [GOV.UK](http://GOV.UK).

If you have a director in your company who requires a special NI calculation as a director, iQ can manage their salary correctly.

### Accessing the Tax and NI Screen

1. Select an employee in the main navigator section.
2. In the **Forms** area on the right, select **Tax and NI**.

### Setting director's NI

1. From the Tax and NI screen, select the **National Insurance** tab.
2. In the National Insurance Director Status section, click **Director Status**.

![](https://cdn.document360.io/fc2cda72-4645-4b36-96bf-60439ec11f11/Images/Documentation/image-A3FLWBIJ.png)

#### Specify the calculation mode

![](https://cdn.document360.io/fc2cda72-4645-4b36-96bf-60439ec11f11/Images/Documentation/image-SWXX1SAR.png)

1. **Calculate NI as Director in Tax Year:** If this employee is a director, select this option, regardless of which calculation method you wish to use.
2. **From Date**: Enter the date when the director's role commenced.
3. **Treat as Director on Account:**
  - Leave this box unticked to use the [standard annual earnings period method](/iq/docs/how-do-i-set-up-directors-national-insurance-ni-in-the-system#what-is-directors-ni) to calculate NI. Here, NI is calculated cumulatively using the director’s total pay in the tax year so far, less any NI already paid.
  - Tick this box to use HMRC’s [alternative method](/iq/docs/how-do-i-set-up-directors-national-insurance-ni-in-the-system#what-is-directors-ni) for calculating NI. This is the non-cumulative method during the year. At the end of the tax year or when the director leaves, the system recalculates NI using the director’s annual earnings and deducts any NI due.

## Adding a National Insurance Category

After completing the steps mentioned above:

- If you add a national insurance category (for instance, **A - standard**), the system will automatically determine and calculate the national insurance for that director based on the rules specific to directors' NI.