Adjust director salary and dividend amounts to find the extraction mix that minimises total tax across company and personal layers. See employer NI, dividend tax and retained profit side by side.
Updated for 2026/27. Uses UK corporation tax, dividend tax and PAYE assumptions. Estimates only — not tax advice.
Calculate company tax Read the guidesCompare salary vs dividends for UK limited company directors 2026/27. Find the optimal split to minimise NI, corporation tax and personal income tax. Free calculator.
Updated for 2026/27. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance · Editorial standards · Methodology. Estimates for planning only — not tax, accounting or financial advice.
Figures reviewed for the 2026/27 tax year (last updated July 2026). Source: GOV.UK.
Most directors pay themselves a small salary and take the rest as dividends, but the exact salary level changes your total tax bill. This tests the standard director salary levels against your profit figure and shows which keeps the most in your pocket. It uses the same engine as the calculator above, so every figure ties out.
| Director salary | Dividends | Corp tax | Personal tax | Take-home | vs best |
|---|---|---|---|---|---|
| £0 | £58,875 | £16,125 | £11,444 | £47,430 | −£6,097 |
| £5,000 | £55,200 | £14,800 | £10,130 | £50,069 | −£3,458 |
| £9,100 | £51,734 | £13,550 | £8,891 | £51,943 | −£1,585 |
| £12,570 ★ | £48,801 | £12,493 | £7,842 | £53,528 | — |
| £50,270 | £14,530 | £3,408 | £15,572 | £49,228 | −£4,299 |
Why £12,570 wins: Uses the full Personal Allowance; salary is corporation-tax deductible. Each option pays out all available post-tax profit as dividends. Change the company profit, region or pension in the calculator above to refresh these numbers.
Assumes the director has no other personal income unless entered above, and that the company can pay the salary. It does not model the £5,000 Employment Allowance (unavailable to most single-director companies), pension tapering or student loans. Estimates for planning only — not tax advice.
This calculator focuses on one decision: the split between salary and dividends when extracting money from a limited company in 2026/27. The mix matters because the two are taxed on completely different systems. Salary is a deductible company expense that attracts employer National Insurance at 15% above £5,000, plus employee NI and income tax. Dividends carry no National Insurance at all but are paid from profit that has already borne corporation tax, and they have their own rates: 10.75% basic, 35.75% higher and 39.35% additional, after a £500 dividend allowance.
The common pattern is a £12,570 salary that uses the full Personal Allowance, topped up with dividends. After that salary, roughly £37,700 of dividends fall inside the basic-rate band up to £50,270 and are taxed at just 10.75%. Dividends above that point cross into the higher-rate band and jump to 35.75%, which is the step this tool is built to make visible.
The trade-off is straightforward once you see both sides together: salary triggers employer NI above £5,000 but reduces corporation tax as a deduction, while dividends avoid NI entirely but sit on top of already-taxed profit. Adjusting the split here shows where the combined company-and-personal tax is lowest for your profit level.
A limited company must keep its finances separate from personal accounts. These accounts are free to open.
Companies House now charges £100 to register a limited company online (up from £50 in February 2026). Same-day digital registration is £156. You can register directly at gov.uk or through a formation agent.