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CALCULATORS · FREE TO USE · 2026/27 RATES
Salary vs dividends calculator - find your most tax-efficient split
Most limited company directors pay themselves through a combination of salary and dividends. The split you choose affects how much income tax, National Insurance and corporation tax you pay. Use this calculator to see exactly what each combination costs - and what you actually take home.
2026/27
Current HMRC rates
Free to use
No sign-up required
Every case differs
Results are illustrative
Fixed fee
Agreed on the call
WHAT THIS SHOWS
Understanding your results
The calculator breaks your tax position into every component - so you can see the full cost of each pound you take out of your company, not just your personal tax bill.
Income tax
Personal tax on your salary above the £12,570 personal allowance. Charged at 20% basic rate, 40% higher rate and 45% additional rate depending on your total income. The calculator highlights which band you're currently in and shows the tax in each band separately.
Dividend tax
Tax on dividends above the £500 dividend allowance. For 2026/27 the rates are 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. Dividends are stacked on top of your salary to determine which rate applies.
Corporation tax
Tax paid by the company on its profits before dividends are declared. The effective rate depends on profit level — 19% up to £50,000, 25% above £250,000, with marginal relief applied between those thresholds. The calculator shows the total CT, the effective rate, and how much of it relates to the profit paid out as dividends.
National Insurance
Employee NI on your salary at 8% between £12,570 and £50,270, dropping to 2% above £50,270. The calculator breaks down how much sits in each band. Employer NI is paid by the company at 15% on salary above £5,000 — this reduces the profit available for dividends, so it is shown separately in the breakdown.
HOW TO USE THIS CALCULATOR
Enter your company profit
Before salary, before corporation tax
Add any other income
Rental, employment or pension income
Adjust salary and dividends
Slide to find your most efficient split
See your full breakdown
Every tax updated live as you move the sliders
Your details
Income tax bands
Employee NI bands
Tax breakdown
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We're reviewing your calculation so we can hit the ground running. Pick a time below that works best for you — we genuinely look forward to speaking with you and helping you find the structure that works hardest for your situation, so you can keep more of what you earn.
YOUR POSITION IS UNIQUE
The calculator gives you a starting point - not a final answer
Your optimal salary and dividend split depends on more than just profit. Your other income, pension contributions, mortgage plans, future investment, property portfolio and long-term goals all affect the right answer. A qualified accountant looks at the full picture and gives you a recommendation built around your situation - not a generic rule of thumb.
Book a free 20-minute call →COMMON QUESTIONS
Salary vs dividends - your questions answered
Everything you need to know before making a decision.
What is the most tax-efficient salary for a limited company director in 2026/27?
For most directors, the optimal salary is £12,570 - the personal allowance threshold. At this level you pay no income tax and no employee NI, while the company pays employer NI only on amounts above £5,000. If you have other income sources the optimal figure may differ. The free discovery call will confirm the right number for your situation.
Should I take dividends or salary?
For most limited company directors, a combination works best - a low salary up to the personal allowance, with the remainder taken as dividends. Dividends are not subject to National Insurance and are taxed at lower rates than salary. However the right split depends on your profit level, other income and long-term plans. This calculator shows the numbers - a qualified accountant gives you the recommendation.
How does corporation tax affect my dividend?
Dividends can only be paid from post-tax profits. So before you can take a dividend, the company pays corporation tax on its profits first. This calculator shows how much of your corporation tax bill relates to the profit you're taking as dividends - so you can see the true total tax cost of your pay package, not just the personal tax.
What is marginal relief and does it affect me?
Marginal relief applies if your company profit falls between £50,000 and £250,000. Rather than jumping straight to 25% corporation tax, the effective rate increases gradually from 19% to 25% across that band. This calculator applies the exact HMRC marginal relief formula, so the corporation tax figure shown is as accurate as possible for your profit level.
Can I take dividends if my company isn't making a profit?
No - dividends must be paid from retained profits after tax. If your company has no available post-tax profits, any payment made as a dividend would be treated as an unlawful dividend by HMRC, which creates significant tax and legal problems. The calculator automatically caps dividends at the available post-tax profit and shows a warning if you exceed it.
Does my salary affect how much dividend tax I pay?
Yes - your salary and other income determine which tax band your dividends fall into. If your salary uses up part of your basic rate band, more of your dividends will be taxed at the higher dividend rate of 35.75%. The calculator stacks income in the correct order so the dividend tax figure reflects your actual position.
GET STARTED
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Pay less tax. Make more money. Free up more time.
Book a free 20-minute call with Bjorgvin. We'll review your current salary and dividend position, identify the most tax-efficient structure and agree a fixed fee - on the call, not after it.
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Chartered accountants, tax advisors and strategists for UK SMEs and property investors. Based at Halton Mill, Lancaster.
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