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Salary vs Dividends Calculator
Find the most tax-efficient director salary and dividend split for 2026/27, after Corporation Tax, dividend tax and National Insurance.
Read the Salary vs Dividends guideYour company
£50,000
£
Profit available to pay you, before any salary, dividends or Corporation Tax.
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Your take-home
£38,862
Salary
£12,570
Dividends
£29,399
Total tax and NI
£11,138
Effective rate 22.3% on company profit, with a £12,570 salary plus £29,399 in dividends.
The tax-efficient split
| Director salary | £12,570 |
| Employer NI on salary | £1,136 |
| Corporation Tax | £6,896 |
| Dividends paid | £29,399 |
| Income tax + employee NI on salary | £0 |
| Dividend tax | £3,107 |
| Total tax and NI | £11,138 |
How the split works
- Salary first: a small director salary is a deductible company cost, so it cuts Corporation Tax. The calculator picks the tax-efficient level for you.
- Then dividends: what is left after Corporation Tax is paid out as dividends, taxed at 10.75% / 35.75% / 39.35% above the £500 allowance for 2026/27.
- No NI on dividends: dividends carry no National Insurance, which is why a salary-plus-dividends split usually beats an all-salary one for a company director.
Frequently asked questions
What is the most tax-efficient director salary for 2026/27?
For most single-director companies the tax-efficient salary is around the Personal Allowance, because the salary is a deductible company cost that cuts Corporation Tax while keeping income tax and employee National Insurance low. This calculator picks the optimal level for your profit.
Why pay dividends instead of salary?
Dividends carry no National Insurance, so for a company director a salary-plus-dividends split usually leaves more in your pocket than taking everything as salary. The trade-off is that dividends are paid from post-Corporation-Tax profit and taxed again at the dividend rates.
What are the 2026/27 dividend tax rates?
Above the £500 dividend allowance, dividends are taxed at 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band. The Nov 2025 Budget raised the first two by 2 percentage points, which narrowed the salary-vs-dividends advantage.
Is this personal tax advice?
No. This is general information for 2026/27. Your optimal split can depend on other income, pension contributions, the Employment Allowance, and whether you have co-directors. Check with a qualified accountant before setting your remuneration.
Related reading
Salary vs Dividends: the director's split
Why the dividend advantage narrowed for 2026/27.
Corporation Tax UK
The 19%/25% rates and the marginal-relief band.
Limited company vs sole trader
Whether incorporating is worth it for your profit.
Corporation Tax Calculator
Work out the company tax bill before you split it.