Dividend Tax Calculator: Director Salary & Dividend Split Solver

Company profit before salary, employer NI & corporation tax

Your company's profit for the year, before the director's salary and employer NI are deducted.

Director's other taxable income

Rental income, a second job, pension income etc. Leave blank if none.

Jurisdiction

England / Northern IrelandScotlandWales

Affects income tax bands on salary only — NI thresholds and dividend tax are UK-wide.

Other employees?

No — I'm the sole director, with no other employees paid above the Secondary ThresholdEmployment Allowance will NOT be applied — this is the common single-director-company case.Yes — the company has other employees paid above the Secondary Threshold (~£5,000/year)Employment Allowance can offset up to £10,500 of employer NI per year.

Number of other associated companies

Companies under common control with this one. Reduces the corporation tax marginal relief limits. Leave at 0 if none.

Student loan plan

Also repaying a Postgraduate Loan

Keep salary at or above the Lower Earnings Limit (£6,708)

Protects a state pension qualifying year. This is a policy choice, not a tax-minimising one — turning it on may reduce the recommended take-home slightly.

£55,764.88

Recommended total take-home for 2026/27

vs taking it all as dividend:£54,160.90 +£1,603.98

Recommended split: £12,570 salary + £52,476 dividend
Item	Amount
Director's salary	£12,570.00
Employer National Insurance	£1,135.50
Company profit after salary & employer NI	£66,294.50
Corporation taxEffective rate 20.8%	£13,818.04
Dividend paid (100% of post-CT profit)	£52,476.46
Employee National Insurance	-£0.00
Income tax on salary + other income	-£0.00
Dividend tax	-£9,281.58
Total take-home	£55,764.88

Why this salary wins

MethodBreakpoint searchEvery salary where a tax, National Insurance or corporation tax rate changes between £0 and £80,000 is tested in full, along with a close scan around the corporation tax marginal relief band where the effective rate moves fastest. Because every candidate is checked rather than estimated, the figure below is the best available answer, not a close approximation.
No salary (£0)£54,160.90Salary £0
Secondary Threshold — employer NI starts£55,012.21Salary £5,000
Primary Threshold — employee NI starts£55,764.88Salary £12,570 — this is the optimum
Upper Earnings Limit£51,831.04Salary £50,270
Maximum affordable salary (profit less employer NI)£51,283.62Salary £70,217

VERIFIEDgov.uk — dividend tax ratesLast checked 2026-04-06

How the three strategies compare

✓ Best option

Optimal split (recommended)

£55,764.88

Total take-home

Salary: £12,570.00
Dividend: £52,476.46
Corporation tax: £13,818.04
Employer NI: £1,135.50
Employee NI: £0.00
Income tax + dividend tax: £9,281.58

Salary only

£51,283.62

Total take-home

Salary: £70,217.00
Dividend: £0.36
Corporation tax: £0.09
Employer NI: £9,782.55
Employee NI: £3,414.94
Income tax + dividend tax: £15,518.80

Salary set as high as the company can sustain without leaving any profit for a dividend.

Dividend only

£54,160.90

Total take-home

Salary: £0.00
Dividend: £62,550.00
Corporation tax: £17,450.00
Employer NI: £0.00
Employee NI: £0.00
Income tax + dividend tax: £8,389.10

£0 salary — all extractable profit taken as dividend.

What this solver doesn't cover

Pension contributions: employer pension contributions are usually more tax-efficient than either salary or dividend for money you don’t need as cash now — not modelled here.
A spouse or second director on the payroll changes the Employment Allowance position and splits the optimisation across two people’s tax positions — not supported.
National Minimum Wage does not apply to a genuine office-holder director with no separate employment contract, but does if you also have one — check your status.
It assumes you take every penny of profit out this year. That is the right question at modest profits, but the wrong one as profits grow: above roughly £100,000 of extraction the marginal pound costs about the same whichever route you use, so the bigger decision becomes how much to extract rather than how. Retaining profit in the company, employer pension contributions, and extracting across several tax years all beat optimising a single year’s split. At high profits the tax that matters is usually the one on eventual sale or liquidation, not this year’s dividend.