Putting Your Children on the Payroll: The Rules From Age 13

Bringing your own children into the family business is a common situation.

Maybe they already help out at weekends, maybe you want to give them a feel for work and earn their own money, or maybe you’d just rather the wage stayed in the family. Done properly, there can be tax savings.

The catch is that it falls under two sets of rules at once. Employment law decides what work a child can do, at what age, and for how long. Tax law decides whether the wage you pay counts as a business expense.

Read on as we walk you through both sides, from the rules that can let a child work part-time from 13 through to how you handle the pay.

The employment-law sections below cover the current rules in England and Wales. Scotland and Northern Ireland have different school-leaving dates and some different child-employment rules.

An August 2026 Update on the Rules

The Children’s Wellbeing and Schools Act 2026 has received Royal Assent. Section 28 rewrites the law underneath everything in this guide, which is section 18 of the Children and Young Persons Act 1933.

The main change is that the system moves off the patchwork of local council byelaws and onto one set of national regulations for England, with Wales able to set its own. The rules should end up more consistent from one area to the next, rather than varying with the council. The permit system stays, but it will run on national rules for how permits are applied for, granted and enforced.

Some things are set to stay the same. The general minimum age is still 14; 13-year-olds can still only work where the rules specifically allow it; light work is still the limit; and both the 12-hour term-time cap and the one-hour break after four hours are unchanged. The latest a child can work moves from 7 pm to 8 pm, and the new framework provides for holiday hours and leave.

There’s an important catch, though. Section 28 is only partly in force, and most of the detail depends on regulations the government still has to make. Until those arrive, the rules in this guide are the ones that apply. Check the current position with the relevant council before you take a child on.

Children Can Sometimes Work From 13

Most children can work part-time from 14. A 13-year-old can only work where the local authority allows it, and even then only in the kinds of light work its rules permit.

Children under 13 can’t be employed at all, and that includes working for a business run by their parent. The exceptions are licensed activities like television, film, theatre, modelling and paid sport.

It’s worth being clear on what counts as employing a child, because it’s broader than people expect. A child is employed if they help with any business run for profit, whether or not they’re paid, and that includes a business run by their parent.

Permits and the Work They’re Allowed to Do

Before a school-age child does anything for the business, you need to work out whether you need a permit, and whether the work is the kind they’re allowed to do.

Getting a Permit

For a child of compulsory school age, you’ll usually need a child employment permit from the council that covers the area where they’ll work. The details are set by local byelaws, which vary from place to place, so check with the council before they start.

As the employer, you have to assess the risks to the child’s health and safety, and explain those risks and how you’re handling them to their parent or guardian. You’ll also need to keep records of their employment, hours and pay. This all applies even when you’re the parent doing the employing.

Because it’s a real job, you also have to give the child a written statement of employment particulars. The main statement is due on their first day and covers things like the job, the hours and the pay, with the rest following within two months.

Check your Employers’ Liability insurance before they start. If the business is a limited company, the family-business exemption does not apply, so the policy must cover the child. An unincorporated business that employs only specified close relatives may be exempt, but confirm the position with your insurer before anyone starts.

Your child may also be entitled to statutory paid holiday. That’s separate from the child-employment rule about two clear weeks off during the school holidays.

What Counts as Light Work

Children can only do “light work,” meaning work that isn’t likely to harm their health, safety or development, or get in the way of school. Where a council does let 13-year-olds work, its rules will limit them to set categories. Common ones include:

• Shop and office work: serving customers, stacking shelves, filing and admin.
• Light agricultural or horticultural work: helping on a farm, in a nursery or at a garden centre.
• Delivery rounds: newspapers, magazines and other printed material. Check the local rules before you let them collect any money.
• Hairdressing salons: sweeping, washing and front-of-house help.
• Cafés and restaurants: serving and clearing, but not working in the kitchen.
• Animal care: riding stables and, in some council areas, kennels and catteries.

From 14, a child can do other light work too, as long as it isn’t barred by national law or the council’s rules.

The Jobs That Are Off Limits

National law and local byelaws rule out a range of jobs for school-age children. The exact list varies by council, but it usually rules out:

• Industrial settings: factories, building sites and similar workplaces.
• Commercial kitchens: cooking and food preparation in a working kitchen.
• Licensed and gambling premises: bars and betting shops.
• Anything hazardous: dangerous machinery, chemicals, heavy lifting, or work that’s otherwise harmful.

Some of these are national and some come from local byelaws, so check the council’s full list rather than assuming a job’s fine because it looks harmless.

The Hours a Child Can Work

The limits on hours are strict, and they differ between term time and the holidays. Under the current England and Wales rules, a child can’t work before 7 am or after 7 pm, can’t work during school hours, and has to get at least two clear weeks off during a period when they’re not in school. They also have to get a one-hour break if they work more than four hours in a day.

Within that, the limits are:

In England and Wales, these limits apply until the child reaches school-leaving age, which is the last Friday in June of the school year they turn 16. Scotland and Northern Ireland use different dates.

After school-leaving age, the child-employment rules and the permit system give way to the rules for young workers. A 16- or 17-year-old can generally work up to eight hours a day and 40 hours a week, subject to rules on breaks, rest and night work. In England, they also have to stay in some form of education or training until 18.

So the older your child gets, the more they can do, from a few hours at 13 to something close to a normal part-time job once they’ve left school age.

Do You Have to Pay a Child the Minimum Wage?

A child who’s still of compulsory school age isn’t entitled to the National Minimum Wage, so there’s no legal minimum on what you pay while that’s the case.

The test is school-leaving age, not the child’s birthday. In some parts of the UK, a young person can pass compulsory school age while they’re still 15, while a 16-year-old can stay of compulsory school age until the official leaving date.

Once they’re over compulsory school age, the under-18 minimum wage normally applies. From 1 April 2026, that’s £8.00 an hour. There is a narrow exemption where a family member lives in the employer’s family home and shares in the family’s tasks and activities, but it does not apply where the employer is a limited company.

Most young people get a National Insurance number shortly before their 16th birthday. If it hasn’t arrived, they can still start work and go on the payroll, collect their other details and leave the National Insurance number blank until you have it.

When a Child’s Wage Counts as a Business Expense

A wage to your child only counts as a business expense if it’s genuinely for the business. HMRC’s test is that it’s spent “wholly and exclusively” for the purposes of the trade. In practice, you need to be able to show three things:

• The child does the work: they do real tasks for the business, not a job that only exists on paper.
• The pay is commercial: it’s a fair rate for the work, the hours, and their age and experience, not one you’ve bumped up because they’re your child.
• The arrangement is genuine and documented: keep a job description, timesheets, payslips and proof of payment. Paying into the child’s own account is the clearest record.

If you can’t back those up, HMRC can disallow all or part of the wage. Where the child does the work but you’ve paid over the odds, it’s usually the excess that’s refused. Where there’s no real job behind it, the whole deduction is at risk.

Say your 14-year-old helps in your shop for five hours on a Saturday and does a bit of filing after school. A fair wage for that might be £40 or £50 a week. They’re under 16, so there’s no minimum wage to meet, but the rate still has to be one you’d pay anyone else. Pay them £200 a week for a couple of hours of light tidying, and you could run into issues.

What It Saves, and How You Pay Them

First, the wage is a cost to the business, so it lowers your profit and the tax on it. And your child usually pays little or no tax on the wage. So money that would have been taxed in the business ends up taxed lightly, or not at all, in your child’s hands.

What Your Child Pays

Whether your child pays anything depends on a few thresholds:

• Income Tax: everyone can earn £12,570 a year before paying Income Tax, so a child with no other income pays none below that.
• National Insurance under 16: a child under 16 pays no employee National Insurance, and you pay no employer National Insurance on them.
• Employee National Insurance from 16: once they’re 16, they pay National Insurance only on earnings above £242 a week or £1,048 a month in 2026/27.
• Employer National Insurance under 21: you pay no employer National Insurance on an under-21’s earnings up to £967 a week or £4,189 a month.

Watch one thing with National Insurance. The £12,570 is an annual figure, and it’s only for Income Tax. Employee National Insurance is worked out separately for each pay packet once the child is 16. So paying a whole year’s wages in a few weeks over the summer can create National Insurance in those weeks, even though the yearly total is under £12,570. Pay the same amount evenly across the year and you avoid it.

A Worked Example

Say you run a limited company, and your 16-year-old, who’s past school-leaving age, works for you over the summer and at weekends. You pay them £9 an hour, around 20 hours a week, for 20 weeks. That’s £185 a week and £3,700 for the year.

They pay no Income Tax, because £3,700 is under the £12,570 allowance. They pay no employee National Insurance, because £185 a week is under the £242 threshold. You pay no employer National Insurance, because they’re under 21. And the company takes £3,700 off its profit, which cuts its Corporation Tax by £703 at the 19% rate, £925 at the 25% rate, or up to about £981 at the 26.5% marginal rate.

The example leaves out two things. Your child also builds up statutory holiday pay as a worker, which you have to pay and run through payroll. And, as above, paying that £3,700 in larger lumps could bring National Insurance into it.

Do You Need to Run Payroll?

This depends on your child’s age and on whether you already run PAYE.

A child under 16 pays no Class 1 National Insurance. GOV.UK says that, for an under-16, you generally only need to put them on the payroll if their total income is above the personal allowance. If you already run a PAYE scheme, though, you have to record and report everyone you pay, including anyone earning below the usual thresholds.

From 16, the normal rules apply. If you’re not already registered, you’ll generally have to register as an employer once you pay someone £96 or more a week in 2026/27. You may also have to if they’ve had another job since 6 April, get a pension, have had certain state benefits, or you give them taxable expenses or benefits.

So the £6,708 Lower Earnings Limit isn’t the line for whether you register. It’s a National Insurance threshold, used for building up State Pension credits and for reporting.

Where PAYE applies, report their pay to HMRC on or before each payday, using the right National Insurance category. Give them a payslip on or before payday, a P60 if they’re still with you on 5 April, and a P45 when they leave. The right to a payslip doesn’t depend on any tax being deducted, so hand one over even if there’s no PAYE scheme. Either way, keep records of their work, hours, holiday and pay.

One more thing, on pensions. A 16- or 17-year-old won’t normally be enrolled into a workplace pension automatically, because automatic enrolment starts at 22. They can ask to join your scheme, and you may have to contribute, depending on what they earn.

Common Mistakes to Avoid

Most of the trouble here comes down to a few avoidable errors:

• Paying for work that isn’t done: a wage for a child who does little or nothing is the quickest way to lose the deduction.
• Paying over the odds: a rate well above what the job’s worth, so HMRC disallows the excess.
• No real payment trail: a single figure in the year-end accounts is weak on its own. Pay the wage regularly, ideally into the child’s account, and keep the payslips and bank records.
• Ignoring the permit or the hours: breaking child employment law carries its own penalties, on top of anything on the tax side.
• Keeping no records: without a note of what they did and what you paid, you’ve nothing to show if HMRC asks.

Getting Child Employment Right

Employing your children can work well in a family business, but there are rules on both the employment and tax sides, and getting either wrong costs more than the savings are worth. The work has to be real, the hours lawful, any permit in place, the paperwork done, and the pay something you can stand behind.

At Double Point, we can set it up properly: check what your child can do at their age, get them on the payroll, keep the records HMRC would want to see, and fit it into your wider tax planning. If you’re thinking about bringing a son or daughter into the business, book a free consultation and we’ll help you get it right.

Disclaimer: This article is general information, not tax or legal advice, and doesn’t cover every situation. The rules and figures are correct as at the date of writing but can change. Before acting, check the current position with the relevant local authority and take advice on your own circumstances. Double Point accepts no liability for any action taken based on this article.