A company with two working director-shareholders, often a couple or two founders, can take far more at basic rate than a company with one. Each director has their own Personal Allowance, £500 dividend allowance and basic-rate band, and the company can usually claim the Employment Allowance. Here is the split for 2026/27 with the numbers.
Written by James Whitfield · Last checked 19 October 2026 · Checked against 2026/27 HMRC rates · Editorial standards · Methodology
For 2026/27 the usual split for two directors is a £12,570 salary each, with the remaining profit paid as dividends in proportion to shareholdings. Because both directors are paid above the £5,000 secondary threshold, the company can usually claim the £10,500 Employment Allowance, which wipes out the £2,271 of employer NI on the two salaries.
On £100,000 of profit before salaries, two 50/50 directors take home £77,701.60 between them, against £65,209.63 for a single director on the same profit. Both stay in the basic-rate band up to about £122,600 of company profit.
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Personal tax is charged person by person. A single director drawing £67,000 of dividends pushes most of it into the 35.75% higher rate. Split between two people, the same dividends sit inside two basic-rate bands at 10.75%.1
Each director gets their own £12,570 Personal Allowance, their own £500 dividend allowance and their own £37,700 basic-rate band.2 With a £12,570 salary each, a couple can draw up to £100,540 of combined income (2 × £50,270) before either pays a higher rate.
The split only works if the second person is a genuine shareholder. Dividends are paid on shares, so whoever owns the shares receives the dividends.
A company cannot claim the Employment Allowance if its only employee paid above the secondary threshold (£5,000 for 2026/27) is a director.3 Once a second employee, including a second director, is paid above £5,000, that exclusion no longer applies.
Two £12,570 salaries create £2,271 of employer NI (15% of £7,570 each). The £10,500 allowance covers all of it. Employer NI is a deductible expense, so the net gain is smaller than £2,271: on £100,000 of profit it adds £1,489.74 to the couple's take-home once the lost corporation tax deduction is allowed for.
Check the other conditions before claiming: the allowance is claimed through payroll software on the Employer Payment Summary, and some businesses (for example public bodies, and employers whose only employees are personal care or domestic staff) are excluded.3
Two directors each own 50% of the shares, have no other income, take a £12,570 salary each and the company claims the Employment Allowance. All post-tax profit is paid out as dividends. Figures for England, Wales and Northern Ireland, 2026/27.
| £100,000 profit: corporation tax (two directors)Taxable profit £74,860 after two salaries | £16,087.90 |
| £100,000 profit: dividend eachDividend tax £3,105.25 each | £29,386.05 |
| £100,000 profit: take-home each | £38,850.80 |
| £100,000 profit: two directors combined | £77,701.60 |
| £100,000 profit: one director | £65,209.63 |
| £200,000 profit: take-home eachCorporation tax £42,587.90; dividend £66,136.05 each; dividend tax £14,164.89 each | £64,541.16 |
| £200,000 profit: two directors combined | £129,082.32 |
| £200,000 profit: one director | £105,765.05 |
| Two directors keep more on £100,000 / £200,000 | £12,491.97 / £23,317.27 |
Both directors stay inside the basic-rate band until each receives £37,700 of dividends. With two £12,570 salaries and the Employment Allowance, that point is reached at about £122,623 of profit before salaries, giving £46,271 each (£92,542 together).
Without the Employment Allowance the £100,000 example falls to £76,211.86 combined, because the company pays £2,271 of employer NI.
Salaries can differ. Each director's salary should reflect the work they do, and both are deductible for corporation tax if paid wholly and exclusively for the business.
Dividends cannot simply be split however you like. Under the model articles, a dividend must be paid in accordance with the shareholders' rights and, unless the terms of the shares say otherwise, by reference to each shareholding, so on a 50/50 holding of one class each director receives the same dividend.4 To pay different amounts, companies use separate share classes (for example A and B shares), with the right to declare different dividends written into the articles.
If shares or dividend rights are given to a spouse or partner mainly to shift income, HMRC can apply the settlements rules and tax the income on the person who gave the shares away. An outright gift of ordinary shares between spouses or civil partners is generally exempt, but shares that carry little more than a right to income are not.5 Take advice before setting up a different share class for a spouse.
1. Make sure the second person really is a director and/or shareholder: appoint them at Companies House and issue or transfer shares, recorded in the register of members.
2. Run both salaries through payroll at £1,047.50 a month each (£12,570 a year). Directors' NI is worked out on an annual earnings period, so the timing of payments within the year does not change the total.
3. Claim the Employment Allowance through your payroll software once both salaries are above £5,000 for the year.
4. Declare each dividend with a board minute and issue a voucher to each shareholder showing the amount per share.
5. Check that the total each person draws keeps their income where you want it: £50,270 is the top of the basic-rate band and £100,000 is where the Personal Allowance starts to taper.
Usually £12,570 each. It uses each director's Personal Allowance with no income tax or employee NI, and with two directors paid above £5,000 the company can normally claim the £10,500 Employment Allowance to cover the £2,271 of employer NI.
Usually yes. The exclusion only applies where a director is the company's only employee paid above the £5,000 secondary threshold. Once two directors are both paid above £5,000, the company can claim if it meets the other conditions.
About £77,702 between them for 2026/27 (£38,851 each) with £12,570 salaries, the Employment Allowance and 50/50 dividends, compared with £65,210 for one director taking everything.
Not on the same class of shares: a dividend is paid at the same rate per share. Different amounts need separate share classes, and dividends routed to a spouse can be caught by HMRC's settlements rules.
To receive dividends, yes. A director who holds no shares can only be paid salary, bonus or pension contributions.
The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.
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.