Director Salary vs Dividends Calculator 2026/27

Director Salary vs Dividends Calculator 2026/27

Net to director

£55,765

£24,235 total tax across CT, NIC, IT and dividend tax · effective 30.3%

2026/27 rates · Last checked · Sources in page details

Limited company assumption

This assumes a simple UK limited company, one director-shareholder, a 12-month accounting period and no Employment Allowance. Associated companies, other employees, benefits, loans or retained-profit planning can change the optimum.

Where company profit goes

Total tax £24,235

£80,000 pre-extraction

Net to director

£55,765

Corporation tax

£13,818

Employer NIC

£1,136

Personal IT + NIC

£0

Dividend tax

£9,282

Optimum split

On £80,000 profit, the salary that maximises your net is £12,570 + dividends.

Net at optimum: £55,765

Try a salary level

£0 to £50,270

Drag the slider, see how the mix changes net-to-director.

Salary

£12,570

+ £52,476 dividend

Net to director

£55,765

At the optimum

£0£25k£50k

Where your tax goes

on £24,235 total tax

This is an estimate. The government does not set aside your exact tax for these areas.

21%

£5,162

Welfare

≈ 74 weeks of welfare per citizen

21%

£5,065

Health

≈ 517 days of NHS care (per citizen)

12%

£2,884

State Pensions

≈ 12 weeks of state pension

11%

£2,617

National Debt Interest

10%

£2,496

Education

≈ 66 school days funded

6%

£1,333

Defence

See the full UK budget →

+ £4,701 across public order & safety, transport, business & industry and 6 more

Estimates onlyShow

Calculations use HMRC published rates for education and illustration. They are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.

More guides and tools

2 related links

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Background reading

8 min read

Director salary vs dividends in 2026/27

Walk through the company and personal tax trade-offs behind the salary-dividend split.

Company tax

Live tool

Corporation tax calculator

See the small profits rate, main rate and marginal relief that sit behind director extraction.

Background reading

Salary vs dividend for UK ltd directors

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Most one-person ltd company directors optimise extraction by paying themselves a small salary plus dividends. Salary is corporation-tax deductible, but attracts personal income tax and NIC. Dividends pay no NIC and have their own tax bands, but are paid from post-corporation-tax profit. The optimum balance depends on your company's CT band and personal income, this calculator finds it for your numbers.

  • What's the optimum salary for a director shareholder?

    It depends on company profit, corporation-tax band and personal income, but commonly around £12,570 (the personal allowance), high enough to get a qualifying year for State Pension, low enough to avoid most personal NIC. The Afterax director-mix calculator sweeps salary £0 → £50k and finds the precise optimum for your numbers.

  • Why would a director take any salary at all?

    Salary is deductible for corporation tax at 19 to 25% and counts towards State Pension. Dividends aren't deductible. So even if salary attracts personal income tax + NIC, the corporation tax saved often more than offsets it. The trade off depends on your company's CT band.

  • Should the company pay an employer pension contribution?

    Often yes. Employer pension contributions are corporation-tax deductible AND avoid personal income tax + NIC AND avoid employer NIC. In tax efficiency they typically beat both salary and dividends, subject to the £60,000 annual allowance.

  • Can I take a salary above the National Minimum Wage as a director?

    If you're an office holder only (not an employee), NMW doesn't apply. If you have an employment contract, it does. Most one-person ltd company directors are office holders, so a £12,570 salary on a notional 'low hours' arrangement is common practice.