ratesheet

Salary vs dividends optimiser

Enter your company's profit before paying yourself. We test seven common salary levels and highlight the one that leaves you the most.

Your numbers

Income minus business costs, before your salary and employer NI.

A £12,570 salary leaves you the most: £65,210 a year.

  • Best salaryKeeps more£12,570Then dividends for the rest
  • Take-home£65,210£5,434 a month
  • Total tax & NI£34,79035% of profit
With a £12,570 salary
  • Take-home 65%
  • Corporation tax 19%
  • Employer NI 1%
  • Personal tax & NI 15%
Take-home at each salary level
SalaryEmployer NICorp. taxDividendsPersonal tax & NITake-home
£0£0£22,750£77,250£13,644£63,606
£5,000£0£21,425£73,575£14,118£64,457
£9,100£615£20,176£70,109£14,345£64,865
£12,570Best£1,136£19,118£67,176£14,537£65,210
£20,000£2,250£16,854£60,896£16,230£64,667
£30,000£3,750£13,806£52,444£18,508£63,936
£50,270£6,791£8,159£34,781£22,811£62,240

Assumes all profit after corporation tax is paid out as dividends this year, and no other income.

2026/27 rates for England, Wales and Northern Ireland. Rates last checked 8 Nov 2026 against GOV.UK: Tax on dividends, Corporation Tax rates, National Insurance rates and categories.

How it’s worked out

As a company director you choose how to pay yourself: salary, dividends or a mix. Salary is a business expense, so it reduces corporation tax, but above £5,000 it costs 15% employer National Insurance, and above £12,570 it costs you income tax and employee NI too. Dividends come out of profit after corporation tax, but are taxed at lower personal rates than salary.

The calculator tests seven common salary levels: nothing, £5,000 (the employer NI threshold), £9,100, £12,570 (the personal allowance and NI primary threshold), £20,000, £30,000 and £50,270 (the top of the basic band). For each it works out employer NI, corporation tax, dividends and your personal tax, then highlights the level that leaves the most in your pocket.

For most single-director companies with healthy profits, a £12,570 salary comes out ahead in 2026/27: the corporation tax saved on the salary outweighs the employer NI. Companies that can claim the Employment Allowance (not usually available to sole-director companies) can find a higher salary pays off.

A salary at or above £6,500 (the lower earnings limit) also earns you a qualifying year for your State Pension, which is worth weighing up alongside the cash difference.

Questions

What's the best director's salary for 2026/27?

For a sole director with no Employment Allowance, £12,570 usually leaves the most after tax, provided the company has enough profit to cover it.

Why not take everything as dividends?

Salary reduces your company's corporation tax and uses your personal allowance, which dividends can only partly use. With no salary you usually pay more tax overall.

Does this include the Employment Allowance?

No. Companies where the director is the only employee paid above the secondary threshold can't claim it, so it isn't included.

These figures are estimates for guidance only and aren’t financial or tax advice. Speak to an accountant before making decisions.