Salary dividend calculator for UK directors
Compare salary and dividend strategies for UK company directors in 2026/27. Income tax, National Insurance, dividend tax, and corporation tax are modelled together.
What is the optimal salary and dividend split for a UK director?
For 2026/27, a common starting point is a director salary of £12,570, then dividends to top up income. Salary is usually deductible for corporation tax, but can trigger employee and employer National Insurance. Dividends do not trigger National Insurance, but are paid from post-corporation-tax profit and are taxed after the £500 dividend allowance. The right answer depends on company profit, other income, pension planning, student loans, Employment Allowance eligibility, and whether there is more than one director or employee on payroll.
Setup
Company & Income
Personal Tax Details
Best Estimated Take-Home
£65,334.63
Based on the assumptions selected, "Minimal Salary + Max Dividends" appears most tax-efficient.
Salary
£12,570.00
Dividends
£67,176.46
Income Tax
£0.00
Employee NI
£0.00
Dividend Tax
£14,411.83
Student Loan
£0.00
Corporation Tax
£19,118.04
Effective Tax Rate
18.07%
Estimated Net Take-Home
£65,334.63
81.93% retained
Scenario Comparison
| Scenario | Salary | Dividends | Total Tax | Net |
|---|---|---|---|---|
| Minimal Salary + Max Dividends ✓ | £12,570.00 | £67,176.46 | £14,411.83 | £65,334.63 |
| NI Threshold + Dividends | £12,570.00 | £67,176.46 | £14,411.83 | £65,334.63 |
| Higher Salary (£50,270) + Dividends | £50,270.00 | £34,780.99 | £22,811.45 | £62,239.54 |
| Salary Only | £80,000.00 | £0.00 | £23,042.60 | £56,957.40 |
| Dividend Heavy | £6,396.00 | £72,395.03 | £16,277.47 | £62,513.56 |
Take-Home Comparison
Insight
Dividends are generally taxed at lower personal rates than salary, but they come from post-corporation-tax profits.
A salary up to the personal allowance (£12,570) is usually NI-free for employees and avoids income tax entirely.
For personalised advice on the most efficient structure for your circumstances, speak with RR Accountants.
Disclaimer: This tool provides general estimates for planning purposes only. Results depend on the assumptions entered and do not constitute tax advice. Your actual position may differ. Always consult a qualified accountant.
Want a more tax-efficient remuneration strategy?
The best mix of salary, dividends, pension, and company profit extraction depends on your wider tax position, business structure, and goals. RR Accountants helps directors and business owners structure income properly.
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What this optimiser helps you compare
Salary vs Dividends
Compare different remuneration splits to see how take-home income changes.
Tax Efficiency
Estimate how tax, National Insurance, and dividend tax affect the overall outcome.
Scenario Planning
Review multiple common director pay structures side by side.
Advisory Context
Use the numbers as a starting point before making real tax planning decisions.
This optimiser is designed to provide a practical estimate for planning purposes. For tailored remuneration advice, speak with RR Accountants.
2026/27 rates this calculator is built around
- Personal allowance: £12,570.
- Dividend allowance: £500.
- Dividend tax rates: 10.75%, 35.75%, and 39.35% above the allowance.
- Corporation tax: 19% small profits rate, 25% main rate, with marginal relief between £50,000 and £250,000.
Checked against GOV.UK guidance on dividend tax, corporation tax, and employer thresholds.
Frequently Asked Questions
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