Dividend vs Salary Calculator
Find the most tax-efficient way to pay yourself as a company director
Take-home pay
£0
Optimal salary
£0
via payroll
Dividends
£0
from taxed profit
Your tax rate
0%
Cost to your company
£0
Where the money goes
You keep
You pay
Income Tax
Employee NI
Dividend Tax
Your company pays
Employer NI
Corporation Tax
Total tax
Cost to company
Amount
Share
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Detailed comparison
The same pay packet at key salary levels, including the optimal split.
| Salary | Dividends | Your Tax | Company Tax | Total Tax | Cost to Company | Overall Rate | 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 (10.75% 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 rest of your pay is extracted as dividends at a lower overall rate.
What salary level should I set as a director?
For most company directors in 2026/27, 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 (2026/27). Companies where the only employee earning above the NI threshold is a director cannot claim it, so the toggle is off by default — switch it on if your company has other employees and qualifies.
What does “cost to your company” include?
Dividends can only be paid from profit that has already been taxed, so the calculator grosses your dividends up to the company profit needed to fund them — using the 19% small profits rate, 25% main rate or marginal relief as appropriate. Cost to company = salary + employer National Insurance + that pre-tax profit. It’s what your company has to earn for you to receive your pay.
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.