Salary benchmarking calculator, 2026/27

How this is calculated

Both your current and benchmark salaries are run through the standard 2026/27 income tax bands and employee National Insurance rates to arrive at an estimated take-home figure for each, using the same personal allowance tapering rules that apply to any salary. The gross and net gaps between the two figures are then shown side by side.

This isolates how much of a headline pay gap actually reaches your bank account after tax and NI, since a £15,000 gross salary increase does not translate into a £15,000 increase in take-home pay once higher rate tax and NI are accounted for.

Benchmarking a director's own salary

Director-shareholders often set their own salary well below a typical market rate for the same role, topping up total income with dividends instead, which is usually more tax-efficient overall but can distort a simple pay comparison against employed peers or against a specific job.

This calculator is most useful for checking a specific figure against a role you have found published elsewhere, such as a recruitment agency survey or job advertisement, rather than for setting an optimal director's salary structure, which usually depends on wider dividend and pension planning too.

What this does not cover

It ignores pension contributions, benefits in kind, bonuses and any dividend income, all of which can materially change the real value of a role beyond the base salary figure alone.

For a full picture of optimal director remuneration combining salary and dividends, use the Salary vs Dividend Calculator alongside this tool.

Where do I find a market benchmark salary?

Recruitment agency salary surveys, job advertisements for similar roles, and sector-specific pay reports such as those published by professional bodies are common sources; this calculator does not generate a benchmark figure itself.

Why is the net pay gap smaller than the gross pay gap?

Because higher salary is taxed progressively, with more of the additional amount falling into higher tax and National Insurance bands, so a bigger gross gap does not translate pound for pound into extra take-home pay.

Should a director's salary always match the market rate?

Not necessarily. Many directors deliberately keep salary low and take dividends instead for tax efficiency, so a lower-than-market salary does not automatically mean the director is worse off overall.

Does this include employer National Insurance?

No, this calculator focuses on the employee's own take-home pay. Employer National Insurance is a separate cost to the company and does not affect the individual's net pay directly.