Mortgages for company directors paid through PAYE
You are a director on a payroll, not a director-shareholder taking dividends. Lenders treat you as employed, with one or two technical notes.
Some company directors are paid entirely through PAYE rather than a small salary plus dividend. This is most common in larger companies where senior managers carry director-level responsibility but are still on the payroll like any other employee. Lenders treat you as employed for borrowing purposes, with a few technical points around bonus, share-scheme income, and minority shareholdings.
Who this is for
- You hold a director role inside a company but are paid through standard PAYE.
- You receive bonuses, RSUs (restricted stock units) or other variable pay and want them counted properly.
- You hold a small minority shareholding in the company you work for.
- A high-street lender has flagged your director status and refused to assess you as employed.
The first thing to clarify is that director on payroll and director-shareholder are very different cases. If you are paid through PAYE with normal payslips, P60s, and tax codes, lenders almost always treat you as employed. The "director" job title alone does not make the case self-employed.
How PAYE directors are assessed
Standard employed assessment. Three months of payslips, the latest P60, an employer reference where requested, three months of bank statements, and standard ID. Lenders use the gross annual salary plus any guaranteed contractual elements as the borrowing-relevant income.
Bonuses
Discretionary bonuses are usually counted at 50 percent of the average over the last two years, although a small number of lenders count 100 percent for stronger profiles or where the bonus is largely guaranteed. We pick a lender whose bonus treatment matches your situation.
Share scheme income
RSUs (restricted stock units), share options, and similar schemes are inconsistently treated across lenders. Some accept the vested-and-cashed value over the last two years as bonus-equivalent income. Some ignore it entirely. A small group of specialist lenders explicitly include it. We know which is which.
Minority shareholdings
If you also hold a small (under 25 percent) shareholding in the company that pays you, almost all lenders still treat you as employed. The shareholding only triggers self-employed treatment at 20 to 25 percent depending on lender. We confirm before submitting.
Worked example
PAYE director on £90,000 base salary plus £30,000 average bonus over the last two years, with a 5 percent shareholding. A 50 percent bonus lender treats income as £90,000 + £15,000 = £105,000. A 100 percent bonus lender treats it as £120,000. On a 4.5x multiple, that is £472,500 versus £540,000 of borrowing. The 5 percent shareholding does not flip the case to self-employed.
Common pitfalls
Being miscoded as a self-employed director by a high-street lender that auto-flags director job titles. Bonus treatment that ignores RSU vesting. A recent shareholding increase from 4 percent to 25 percent that some lenders pick up at underwriting and switch to self-employed assessment.
How Major Money Matters helps
Specific things we do for this case type. No generic platitudes.
Confirm employed treatment up front
We brief the lender that you are PAYE, so the case is not auto-coded as self-employed.
Maximise bonus treatment
Some lenders count 100 percent of bonus, most count 50 percent. We pick the bigger treatment.
Package RSUs and share schemes
Vested-and-cashed evidence over two years. Some lenders include it, some do not. We know who.
Watch for shareholding triggers
A jump above 20 to 25 percent flips you to self-employed treatment. We flag before submitting.
Frequently asked questions
I am a director but on payroll. Am I employed or self-employed for mortgage purposes?
Almost always employed. PAYE directors with normal payslips, a P60 and a salary structure are assessed as employed by the vast majority of lenders. The "director" title alone does not change that.
How much of my bonus will lenders use?
Typically 50 percent of the two-year average. Some lenders use 100 percent for stronger profiles or contractual bonuses. We pick a lender whose treatment matches your situation.
Can lenders use my RSU income?
Some can. Vested-and-cashed RSU value over the last two years is the usual evidence. The lender pool is narrower than for salary plus bonus, but the income can be counted.
I hold 5 percent of the company shares. Does that change my assessment?
Almost never. Most lenders treat shareholdings under 20 to 25 percent as immaterial, with employed assessment continuing. Above that threshold the case may flip to self-employed treatment depending on lender.
My salary recently jumped because I was promoted to director. Will lenders use the new figure?
Yes, with caveats. Most lenders take the current salary as evidenced by the latest payslip plus contract or letter of appointment. Some smaller lenders prefer to see two to three months of the new salary on payslips before applying it fully.
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Talk to a director PAYE specialist
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