Salary vs dividends calculator
The most tax-efficient way to pay yourself from your limited company.
Your details
Annual profit before your salary, employer NI and corporation tax.
Up to £52,826 — the most the company can pay once employer NI is added. Everything else is paid as dividends.
Other companies under the same control — these reduce the corporation tax limits.
This is the most tax-efficient salary for your profit.
The same £60,000 profit taken out three ways — every tax the company and you pay.
Dividends only No salary | Salary only £52,826 salary, no dividends | LOWEST TAX Best mix £12,570 salary + dividends | |
|---|---|---|---|
| Salary | £0 | £52,826 | £12,570 |
| Dividends | £47,850 | £0 | £37,499 |
| Corporation tax | −£12,150 | £0 | −£8,796 |
| Dividend tax | −£3,739 | £0 | −£3,977 |
| Employer NI | £0 | −£7,174 | −£1,136 |
| Income tax on salary | £0 | −£8,562 | £0 |
| Employee NI | £0 | −£3,067 | £0 |
| Total tax cost | £15,889 | £18,803 | £13,909 |
| Effective tax rate | 26.5% | 31.3% | 23.2% |
| You keep | £44,111 | £41,197 | £46,091 |
A mix costs the least: a £12,570 salary plus dividends means £13,909 in total tax — £4,895 less than the most expensive option.
| How the money flows | Your salary | Best |
|---|---|---|
| Salary | £12,570 | £12,570 |
| Employer NI (company pays) | −£1,136 | −£1,136 |
| Company profit after salary & NI | £46,295 | £46,295 |
| Corporation tax | −£8,796 | −£8,796 |
| Dividends paid out | £37,499 | £37,499 |
| Your income tax on salary | £0 | £0 |
| Your employee NI | £0 | £0 |
| Dividend tax | −£3,977 | −£3,977 |
| Total tax (company + you) | £13,909 | £13,909 |
| You keep | £46,091 | £46,091 |
Want us to handle this for you?
Our accountants can run your payroll, file your tax return and make sure you never pay more than you should.
Why the salary matters
Every £1 of salary is a business expense: it reduces the company's profit, so less corporation tax (19%–25%, about 26.5% in the marginal band). It also reduces the dividends, so less dividend tax (10.75% / 35.75% / 39.35%). But salary above £5,000 costs 15% employer NI, and above £12,570 it costs you 8% NI plus income tax. The best salary is where those balance — the top of the chart.
Common salary levels
Assumes one director takes out all the profit. A salary of at least £6,708 keeps your State Pension record building. Pension contributions, other income and retaining profit in the company also change the answer — talk to us and we'll plan it properly.
Estimates only, based on 2026/27 rates for typical situations. They are not financial advice — speak to us about your own circumstances. Rates last checked: October 2026 (GOV.UK).