Methodology
This calculator applies published HMRC and GOV.UK rates to estimate the tax position of a UK limited company director. The model covers corporation tax, director salary, employer NI, company pension contributions, dividend distribution and personal tax. All results are for planning purposes only.
Written by James Whitfield · Last reviewed 3 November 2026 · Checked against 2026/27 HMRC rates · Editorial standards · Methodology
How we check the calculator
On 3 November 2026 we checked every calculator against a separate reference version of the rules, written from GOV.UK and HMRC guidance rather than our own code, across thousands of combinations of profit, salary, dividends, other income and region. That included every threshold: the £50,000 and £250,000 Corporation Tax limits and marginal relief between them, the £5,000 employer NI threshold, £12,570, £50,270, the £100,000 Personal Allowance taper and £125,140, the £500 dividend allowance and the Scottish bands. We fixed every difference we found.
Fixed test cases with hand-worked answers are part of the site's automated tests, and we run them whenever we change a calculator.
We plan to check again after every Budget and before each new tax year. If you spot something wrong, tell us and we will correct it.
Company profit and tax year
The calculator supports tax years 2025/26 and 2026/27, defaulting to the current active tax year. Company profit is entered as profit before director salary, employer NI and corporation tax. The model then deducts these in sequence to arrive at post-tax distributable profit.
Thresholds, allowances and rates are those published by HMRC for the selected tax year and are reviewed at each Budget. Source links to the relevant GOV.UK guidance are provided throughout.
Corporation tax
For 2026/27: small profits rate 19% on profits at or below £50,000. Main rate 25% on profits above £250,000. Marginal relief applies between £50,000 and £250,000 using the formula: (profits × 25%) − (3/200 × (£250,000 − profits)).
Corporation tax is calculated on company profit after deducting director salary, employer NI and company pension contributions. Dividends are not a company expense and do not reduce taxable profit.
The main calculator does not apply associated company threshold adjustments or short accounting periods. With associated companies, the £50,000 and £250,000 limits are divided by the number of associated companies plus one, and for a period shorter than 12 months they are scaled by the days in the period over 365. The marginal relief calculator on our marginal relief guide does both.
Director salary, PAYE and employer NI
Director salary is deducted from company profit before corporation tax. Employer NI at 15% applies to salary above the secondary threshold of £5,000. Employer NI is itself a company expense and is deducted before corporation tax alongside the salary.
On the personal side, employee NI at 8% applies to salary between £12,570 and £50,270, and 2% above £50,270. Salary and other income are taxed at the income tax rates for the region selected (England, Wales and Northern Ireland, or Scotland). Dividends are taxed at the UK dividend rates wherever you live, because Scottish rates apply only to non-savings, non-dividend income.
The personal allowance is £12,570 for 2026/27 and is tapered at £1 for every £2 of income above £100,000, counting salary, other income and dividends together. When dividends taper the allowance, the extra salary that becomes taxable is charged at your region's income tax rates.
Dividends and dividend tax
Dividends are paid from post-corporation-tax company profit. The available dividend amount is company profit minus director salary, employer NI, company pension contribution and corporation tax. If dividends entered exceed available distributable profit, the model caps distributions at available profit.
Dividend tax for 2026/27: £500 dividend allowance. Above that, 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate). The applicable rate depends on where dividends fall in the director's personal income tax bands, after salary and other income are counted first.
Company pension contributions
Company pension contributions are deducted from company profit before corporation tax. They do not appear in personal income for tax purposes and are not subject to NI.
The calculator does not model the pension annual allowance. Contributions above £60,000 may be subject to a tax charge not reflected in the estimate. For contributions near the allowance, consult an adviser.
Retained company cash
Retained company cash is company profit after all deductions: salary, employer NI, company pension, corporation tax and chosen dividends. If dividends are set below available distributable profit, the difference appears as retained cash. This figure represents current-period modelling only and does not include accumulated prior-period reserves.
What this calculator does not include
Associated company threshold adjustments. Employment Allowance (not applicable for sole director/employee companies where the director is the only employee). VAT. Capital gains. Benefits in kind and the P11D charge. The annual pension allowance charge. Salary sacrifice arrangements.
Results should not be used as the basis for a company tax return, remuneration policy, formal professional advice or compliance decision. For filing, consult a qualified accountant.
Frequently asked questions
Is this a filing tool?+
No. It is a planning calculator for structure decisions, extraction modelling and comparison. For a company tax return or formal remuneration planning, use a qualified accountant.
Why does take-home stay the same when I increase company profit?+
Personal take-home depends on the salary and dividends you choose to extract, not on total company profit. If salary and dividends stay fixed, higher company profit increases retained company cash, it does not automatically increase personal income. To take more personally, increase the dividends figure.
Does the calculator apply marginal relief?+
Yes. Marginal relief is applied automatically when company profit is between £50,000 and £250,000. The formula used is the HMRC standard formula: (profits × 25%) − (3/200 × (£250,000 − profits)).
Estimate your limited company tax
The limited company tax calculator turns this guidance into a concrete estimate for corporation tax, dividends and personal take-home, based on 2026/27 HMRC rates.