Dividend vs Salary Calculator

Find the most tax-efficient way to pay yourself as a company director

Tax year

Company Revenue (before salary)

Total amount available in your company to pay as salary and/or dividends

Claim Employment Allowance

Optimal Split

Salary

£0

Dividends

£0

Take-Home Pay

£0

Take-Home at Different Salary Levels

Total Tax Take-Home

Detailed Comparison

Salary	Dividends	Employer NI	Corp Tax	Income Tax	Employee NI	Div Tax	Total Tax	Take-Home

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Frequently Asked Questions

Why is a low salary with dividends more tax-efficient?

Dividends are taxed at lower rates than salary (8.75% vs 20% basic rate) and don’t attract National Insurance. By keeping your salary at or near the Personal Allowance, you avoid income tax and NI on that portion, while the remaining profit is extracted as dividends at a lower overall rate.

What salary level should I set as a director?

For most company directors in 2025/26, the optimal salary is around £12,570 (the Personal Allowance) which lets you earn tax-free while still qualifying for state benefits like the State Pension. This calculator shows you the exact split that maximises your take-home pay.

What is the Employment Allowance?

The Employment Allowance lets eligible employers reduce their employer National Insurance bill by up to £10,500 per year (2025/26). Single-director companies with no other employees cannot claim this, so untick the box if this applies to you.

Does this account for Corporation Tax?

Yes. The calculator deducts Corporation Tax at 25% (or the small profits rate/marginal relief where applicable) from company profits before calculating how much is available to distribute as dividends.

Is this financial advice?

No. This tool gives an estimate based on standard HMRC rates. It doesn’t account for pension contributions, student loan repayments, other income sources, or individual circumstances. Always consult a qualified accountant for personal advice.